financial statements-consolidated -...

Beximco Pharmaceuticals Ltd. and Its SubsidiariesConsolidated Audited Financial Statements

For the Year Ended June 30, 2019

Financial Statements-Consolidated

Independent Auditor’s ReportTo the Shareholders of Beximco Pharmaceuticals Limited and its Subsidiaries Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of Beximco Pharmaceuticals Limited (the “Company”), which comprise the consolidated Statement of Financial Position as at June 30, 2019 and consolidated Statement of Profit or Loss and Other Comprehensive Income, consolidated Statement of Changes in Equity and consolidated Statement of Cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

The Financial statements of the same year of the subsidiaries Beximco Pharma API Limited was audited by us and Nuvista Pharma Limited was audited by A. Qasem & Co. Chartered Accountants, who through their report dated August 11, 2019 and October 14, 2019 respectively expressed an unmodified opinion on those statements.

In our opinion, the accompanying consolidated financial statements of the Company give a true and fair view of the consolidated financial position of the Company as at June 30, 2019, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations. Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Bangladesh, and we have fulfilled our other ethical responsibilities in accordance with these ethical requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Risk Our Response to the Risk

Valuation of Property, Plant and Equipment (PPE)

The carrying value of the PPE was Tk. 34,056,667,212 as at June 30, 2019. Expenditures are capitalized if they create new assets or enhance the existing assets, and expensed if they relate to repair or maintenance of the assets. Classification of the expenditures involves judgment. The useful lives of PPE items are based on management’s estimates regarding the period during which the assets or its significant components will be used. The estimates are based on historical experience and market practice and take into consideration the physical condition of the assets. The valuation of PPE was identified as a key audit matter due to the significance of this balance to the consolidated financial statements and that there is significant measurement uncertainty involved in this valuation.

See Note No. 4 to the consolidated financial statements

Our audit included the following procedure:

• We assessed whether the accounting policies in relation to the capitalization of expenditures are in compliance with IFRS and found them to be consistent.

• We inspected a sample of invoices and L/C documents to determine whether the classification between capital and revenue expenditure was appropriate.

• We evaluated whether the useful lives determined and applied by the management were in line with historical experience and the market practice.

We checked whether the depreciation of PPE items was commenced timely, by comparing the date of the reclassification from capital work in progress to ready for use, with the date of the act of completion of the work.

Valuation of Inventory

Related party transactions

The inventory of Tk. 5,924,031,678 as at June 30, 2019 was held at different locations across the country.

Inventories are carried at the lower of cost and net realizable value. As a result, the management apply judgment in determining the appropriate values for slow-moving or obsolete items.

Since the value of Inventory is significant to the consolidated Financial Statements and there is significant measurement uncertainty involved in this valuation, the valuation of inventory was significant to our audit.

See Note No. 9 to the consolidated financial statements

The Company has related party transactions as described in Note No. 36 of the consolidated financial statements.

We focused on identification of related parties and disclosure of related party transactions in accordance with relevant accounting standards.

We verified the appropriateness of management’s assumptions applied in calculating the value of the inventory by:

• Evaluating the design and implementation of key inventory controls.

• Attending inventory counts on sample basis and reconciling the count results to the inventory listing to test the completeness of data.

• Reviewing the requirement of inventory provisioning and action there upon by the management.

• Comparing the net realizable value obtained through a detailed review of sales subsequent to the year-end, to the cost price of a sample of inventories.

Our audit procedures amongst others included the following:

• Evaluated the design and tested the operating effectiveness of controls over identification and disclosure of related party transactions.

• Evaluated the transactions among the related parties and tested material accounts balances.

• Evaluated the disclosures in the consolidated financial statements in compliance with IAS 24.

Other Information

Management is responsible for the other information. The other information comprises all of the information in the Annual Report other than the consolidated financial statements and our auditors’ report thereon. The Annual Report is expected to be made available to us after the date of this auditor’s report.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on such work we perform, we conclude that there is a material misstatement of this other information, we are required to communicate the matter to those charged with governance. Responsibilities of Management and Those Charged with Governance for the consolidated Financial Statements and Internal Controls

Management is responsible for the preparation and fair presentation of the consolidated financial statements of the Company in accordance with IFRSs, The Companies Act 1994, The Securities and Exchange Rules 1987 and other applicable laws and regulations

Continuation SheetM.J Abedin & Co.

and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process. Auditor’s Responsibilities for the Audit of the consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal controls of the Company.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.


M. J. Abedin & Co. Chartered Accountants

DhakaOctober 28, 2019

Report on other Legal and Regulatory Requirements

In accordance with the Companies Act 1994, The Securities and Exchange Rules 1987 and relevant notifications issued by Bangladesh Securities and Exchange Commission, we also report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof;

b) In our opinion, proper books of accounts as required by law have been kept by the company so far as it appeared from our examination of those books;

c) The company’s consolidated Statement of Financial Position (Balance Sheet) and consolidated Statement of Profit or Loss and Other Comprehensive Income (Profit & Loss Account) dealt with by this report are in agreement with the books of accounts and;

d) The expenditures incurred and payment made were for the purpose of the company’s business for the year.


Beximco Pharmaceuticals Limited and its SubsidiariesConsolidated Statement of Financial PositionAs at June 30, 2019

Amount in Taka

Notes June 30, 2019 June 30, 2018 ASSETS Non-Current Assets 35,949,930,818 32,394,686,712 Property, Plant and Equipment- Carrying Value 4 34,056,667,212 30,524,692,707 Intangible Assets 5 1,334,921,698 1,280,695,416 Goodwill 6 546,691,213 546,691,213 Investment In Associates 7 - 30,749,850 Other Investment 8 5,329,379 5,757,808 Other Non-current Assets 6,321,316 6,099,718

Current Assets 13,264,161,542 11,344,199,700 Inventories 9 5,924,031,678 5,058,847,681 Spares & Supplies 10 726,127,262 663,911,096 Accounts Receivable 11 3,334,958,905 2,761,509,393 Loans, Advances and Deposits 12 2,309,503,747 2,094,229,902 Advance Income Tax 35,681,115 32,568,508 Short Term Investment 13 323,364,536 339,397,174 Cash and Cash Equivalents 14 610,494,299 393,735,946 TOTAL ASSETS 49,214,092,360 43,738,886,412

SHAREHOLDERS’ EQUITY AND LIABILITIES

Equity Attributable to the Owners of the Company 29,588,317,284 27,081,962,616

Issued Share Capital 15 4,055,564,450 4,055,564,450 Share Premium 5,269,474,690 5,269,474,690 Excess of Issue Price over Face Value of GDRs 1,689,636,958 1,689,636,958 Capital Reserve on Merger 294,950,950 294,950,950 Revaluation Surplus 1,131,853,004 1,159,277,845 Unrealized Gain/(Loss) 2,504,203 4,356,762 Retained Earnings 17,144,333,029 14,608,700,961

Non-Controlling Interest 16 276,006,553 269,874,176

TOTAL EQUITY 29,864,323,837 27,351,836,792

Non-Current Liabilities 6,603,936,369 7,368,863,860 Long Term Borrowings-Net of Current Maturity 17 2,595,607,792 4,017,425,267 Liability for Gratuity and WPPF & Welfare Funds 18 1,860,904,996 1,324,166,498 Deferred Tax Liability 2,147,423,581 2,027,272,095

Current Liabilities and Provisions 12,745,832,154 9,018,185,760 Short Term Borrowings 19 9,272,501,280 5,600,826,635 Long Term Borrowings-Current Maturity 20 1,616,670,549 1,568,989,745 Creditors and Other Payables 21 1,091,809,722 991,712,907 Accrued Expenses 22 590,317,150 418,476,895 Dividend Payable 7,235,215 4,763,126 Income Tax Payable 167,298,238 433,416,452

TOTAL EQUITY AND LIABILITIES 49,214,092,360 43,738,886,412

The Notes are an integral part of the Financial Statements. Approved and authorised for issue by the Board of Directors on October 28, 2019 and signed for and on behalf of the Board :

Salman F RahmanVice Chairman


Per our report of even date

M.J. Abedin & Co.Chartered Accountants

Nazmul HassanManaging Director

Mohammad Ali NawazChief Financial Officer

Beximco Pharmaceuticals Limited and its SubsidiariesConsolidated Statement of Profit or Loss and Other Comprehensive IncomeFor the Year ended June 30, 2019

Amount in Taka

Notes July 2018 - June 2019

July 2017 - June 2018

Net Revenue 23 22,816,629,795 17,716,716,855

Cost of Goods Sold 24 (12,196,286,770) (9,430,737,431)

Gross Profit 10,620,343,025 8,285,979,424

Operating Expenses (5,554,169,458) (4,259,811,440)

Administrative Expenses 27 (752,944,182) (618,675,127)

Selling, Marketing and Distribution Expenses 28 (4,801,225,276) (3,641,136,313)

Profit from Operations 5,066,173,567 4,026,167,984

Other Income 29 139,917,665 43,757,880

Finance Cost 30 (1,029,762,542) (540,283,443)

Share of Loss of Associates 7 (29,325,720) -

Profit Before Contribution to WPPF & Welfare Funds 4,147,002,970 3,529,642,421

Contribution to WPPF & Welfare Funds (200,937,234) (168,308,290)

Profit Before Tax 3,946,065,736 3,361,334,131

Income Tax Expenses 31 (905,662,782) (828,679,830)

Current Tax (803,760,846) (792,620,241)

Deferred Tax (101,901,936) (36,059,589)

Profit After Tax 3,040,402,954 2,532,654,301

Profit/(Loss) Attributable to:

Owners of the Company 3,033,402,333 2,536,543,948

Non-controlling interest 7,000,621 (3,889,647)

3,040,402,954 2,532,654,301

Other Comprehensive Income-Unrealized Gain/(Loss) (1,852,559) 481,697

Total Comprehensive Income for the Period 3,038,550,395 2,533,135,998

Total Comprehensive Income Attributable to:

Owners of the Company 3,031,549,774 2,537,025,645

Non-controlling interest 7,000,621 (3,889,647)

3,038,550,395 2,533,135,998

Earnings Per Share (EPS) 32 7.48 6.25

The Notes are an integral part of the Financial Statements.

Approved and authorised for issue by the Board of Directors on October 28, 2019 and signed for and on behalf of the Board :







Beximco Pharmaceuticals Limited and its SubsidiariesConsolidated Statement of Changes in EquityFor the Year Ended June 30, 2019

Amount in Taka As at June 30, 2019

Share CapitalShare

Premium

Excess of Issue Price over Face

Value of GDRs

Capital Reserve on

Merger

Revaluation Surplus

Unrealized Gain/(Loss)

Retained Earnings

Equity attributable to Owners of the

Company

Non-Con-trolling

InterestsTotal Equity

Balance as on July 01, 2018 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,159,277,845 4,356,762 14,608,700,961 27,081,962,616 269,874,176 27,351,836,792

Total Comprehensive Income:

Share Capital Beximco Pharma API Ltd.

100 100

Profit/(Loss) for the Period - - - - - - 3,033,402,333 3,033,402,333 7,000,621 3,040,402,954

Other Comprehensive Income/(Loss) -

- - - - (1,852,559) - (1,852,559) - (1,852,559)

Transactions with the Shareholders:

Cash Dividend (506,945,556) (506,945,556) (868,344) (507,813,900)

Adjustment for Depreciation on Revalued Assets

(9,175,291) 9,175,291 - -

Adjustment for Deferred Tax on Revalued Assets

- - - - (18,249,550) - - (18,249,550) (18,249,550)

Balance as on June 30, 2019 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,131,853,004 2,504,203 17,144,333,029 29,588,317,284 276,006,553 29,864,323,837

Net Asset Value (NAV) Per Share (Note-33) 72.96

As at June 30, 2018

Share Capital

Share Premium

Excess of Issue Price over Face Value of

GDRs

Capital Reserve on

Merger

Revaluation Surplus

Unreal-ized Gain/

(Loss)

Retained Earnings

Equity attributable to Owners of the

Company

Non-Con-trolling

Interests

Total Equity

Balance as on July 01, 2017 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,190,203,818 3,875,065 12,568,719,969 25,072,425,900 - 25,072,425,900

Acquisition of Subsidiary

273,763,823 273,763,823

Total Comprehensive Income:

Profit/(Loss) for the Period - - - - - - 2,536,543,948 2,536,543,948 (3,889,647) 2,532,654,301

Other Comprehensive Income / (Loss)

- - - - - 481,697 - 481,697 - 481,697


Cash Dividend - - - - - - (506,945,556) (506,945,556) (506,945,556)

Adjustment for Depreciation on Revalued Assets - - -

- (10,382,600)

- 10,382,600 - -

Adjustment for Deferred Tax on Revalued Assets - - - - (20,543,373) - - (20,543,373) (20,543,373)

Balance as on June 30, 2018 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,159,277,845 4,356,762 14,608,700,961 27,081,962,616 269,874,176 27,351,836,792










Beximco Pharmaceuticals Limited and its SubsidiariesConsolidated Statement of Cash FlowsFor the Year ended June 30, 2019

Amount in Taka

Notes July 2018-June 2019

July 2017-June 2018

Cash Flows from Operating Activities :

Receipts from Customers and Others 22,463,550,299 17,195,399,333

Payments to Suppliers and Employees (17,434,690,241) (14,113,012,465)

Cash Generated from Operations 5,028,860,058 3,082,386,868

Interest Paid (1,032,409,014) (536,570,775)

Interest Received 36,457,527 54,928,425

Income Tax Paid (1,072,991,667) (781,630,595)

Net Cash Generated from Operating Activities 35 2,959,916,904 1,819,113,923

Cash Flows from Investing Activities :

Acquisition of Property, Plant and Equipment (4,416,446,385) (4,951,352,340)

Intangible Assets (128,619,282) (106,921,036)

Investment in Subsidiary - (2,125,186,000)

Disposal of Property, Plant and Equipment 17,540,625 14,114,722

Dividend Received 1,491,901 1,504,092

Decrease in Short Term Investment 16,032,638 547,179,732

Net Cash Used in Investing Activities (4,510,000,503) (6,620,660,830)

Cash Flows from Financing Activities :

Net Increase /(Decrease) in Long Term Borrowings (1,412,334,115) 1,859,021,877

Net Increase in Short Term Borrowings 3,684,312,230 3,546,896,539

Share capital 100 -

Dividend Paid (505,351,881) (502,757,959)

Net Cash Generated from Financing Activities 1,766,626,334 4,903,160,457

Increase in Cash and Cash Equivalents 216,542,735 101,613,550

Cash and Cash Equivalents at Beginning of Year 14 393,735,946 292,122,396

Effect of exchange rate changes on Cash and Cash Equivalents 215,618 -

Cash and Cash Equivalents at End of Year 610,494,299 393,735,946

Net Operating Cash Flow Per Share 34 7.30 4.49









Beximco Pharmaceuticals Limited and its SubsidiariesNotes to the Financial StatementsAs at and for the year ended June 30, 2019

1. The Reporting Entity

1.1 About the CompanyBeximco Pharmaceuticals Limited (BPL/ the Company) was incorporated as a public limited company in Bangladesh in 1976 and commenced its manufacturing operation in 1980. It is a leading manufacturer of pharmaceutical formulations and Active Pharmaceutical Ingredients (APIs). The Company was listed with Dhaka Stock Exchange in 1985 and with Chittagong Stock Exchange on its debut in 1995. In 2005, BPL took over Beximco Infusions Ltd., a listed company engaged in manufacturing and marketing of intravenous fluids and got enlisted with the Alternative Investment Market (AIM) of the London Stock Exchange through issuance of Global Depository Receipts (GDRs). In 2018, BPL acquired 85.22% shares of Nuvista Pharma Limited – a non-listed pharmaceutical company in Bangladesh specializing in hormones and steroid drugs and took over control of its management. Shares of the Company are traded in Dhaka and Chittagong Stock Exchanges of Bangladesh and its GDRs in AIM of the London Stock Exchange.

The registered office of the company is located at House No. 17, Road No. 2, Dhanmondi R/A, Dhaka. The industrial units are located at Tongi and Kaliakoir of Gazipur district – vicinities close to the capital city Dhaka. The manufacturing facilities of the Company are certified by leading global regulatory authorities including United States Food and Drug Administration (USFDA).

1.2 The Subsidiaries

Nuvista Pharma Limited (NPL)

Nuvista Pharma, formerly Organon (Bangladesh) Ltd., was a subsidiary of Netherlands based Organon International. It was originally incorporated as a private limited company. In 2006 the foreign holding of the company was sold out to Bangladeshi management and was renamed as Nuvista Pharma Limited. The Company through amendments to its memorandum of association in 2011 converted it into a public limited company. In April 2018, Beximco Pharmaceuticals Limited acquired majority shareholdings in Nuvista Pharma Limited (NPL) and through this acquisition BPL has become the immediate and ultimate parent of the company.

Beximco Pharma API Limited

Beximco Pharma API Limited was formed as a private limited company in December 2017 with a paid up capital of Taka 20 million divided into 2 million shares of Taka 10 each, fully held by BPL. The company intends to set up a facility at API Industrial Park to manufacture Active Pharmaceutical Ingredients (APIs) for domestic and international markets. The company is still in the initial phase of establishment.

1.3 Nature of Business

BPL is engaged in manufacturing and marketing of generic pharmaceuticals formulation products covering a wide range of therapeutic categories. It offers products in different dosage forms including Solid, Liquid, Cream and Ointment, Suppositories, Metered Dose Inhaler, Dry Powder Inhaler, Nasal Spray, Sterile, Lyophilized Injectable, Large Volume Intravenous Fluids. Besides formulation products BPL also manufactures Active Pharmaceutical Ingredients (APIs) and renders contract manufacturing services to other companies. Products of the company are sold in domestic and international markets.

NPL produces various pharmaceutical products including oral contraceptives, hormone, steroid, anti-histamine, anti-fibrinolytic, anti-infective, cardiac, gastrointestinal, musculoskeletal, respiratory, vitamin & mineral supplement and women’s health products which are sold in the local market.

Both BPL and NPL provides contract manufacturing services.

2. Basis of Preparation of Financial Statements

2.1 Statement of Compliance

The financial statements have been prepared in compliance with the requirements of the Companies Act 1994, the Securities & Exchange Rules 1987, the Listing Regulations of Dhaka and Chittagong Stock Exchanges and other relevant local laws as applicable and in accordance with the International Financial Reporting Standards (IFRSs).

2.2 Basis of Measurement

The financial statements have been prepared on Historical Cost basis except for certain Property, Plant and Equipment measured at revalued amount (revaluation carried out in 2008). The Tangible and Intangible Assets and Liabilities of the acquired subsidiary has been reported at their fair values at the date of acquisition. Investment in Shares of listed companies have been valued at the year- end quoted prices. Cash flow statement has been prepared on cash basis.

2.3 Reporting Period

Financial year of Beximco Pharmaceutical Limited (BPL) and its subsidiaries Nuvista Pharma Limited (NPL) and Beximco Pharma API Limited begins on July 1 and ends on June 30.

2.4 Comparative Information

Figures for earlier year have been re-arranged wherever considered necessary to ensure better comparability with the current year.

3. Significant Accounting Policies

3.1 Basis of Consolidation

The financial statements of the subsidiaries-Nuvista Pharma Limited and Beximco Pharma API Limited, have been consolidated with those of Beximco Pharmaceuticals Limited in accordance with IFRS 10: Consolidated Financial Statements.

The Company acquired 85.22% shares of the issued paid up capital of Nuvista Pharma Limited. This ownership interest is adequate enough to establish control over NPL and thus BPL meets the conditions as stated in IFRS 10: Consolidated Financial Statements to consider NPL as a subsidiary.

Beximco Pharma API Limited (BPAL) was formed with a paid up capital of Tk.20,000,000 divided into 2,000,000 shares of Tk.10 each, all of which excepting 10 shares are held by Beximco Pharmaceuticals Ltd (BPL). Beximco Pharma API Ltd thus meets the conditions stated in IFRS 10: Consolidated Financial Statements to consider it as a subsidiary.

Beximco Pharma API Limited (BPAL) is being consolidated for the first time in this financial statement since its date of incorporation.

3.2 Inter-Company Transactions

Assets, Liabilities, Equity, Income, Expenses and Cash Flows arising out of transactions between the Company and the subsidiary have been eliminated in full in the Consolidated Financial Statements.

3.3 Non-Controlling Interests (NCIs)

Non-Controlling Interests (NCIs) at the date of acquisition has been measured at fair value of the net assets of the acquired company in proportion to the shares of the entitled holders. Profit or Loss and Other Comprehensive Income subsequent to the acquisition has been allocated to the Owners of the Company and to the NCIs and also disclosed in the financial statements.

3.4 Valuation of Goodwill

Goodwill has been determined in accordance with IFRS 3: Business Combination. This represents the excess of the aggregate of Purchase Consideration and the acquisition-date fair value of NCI’s share in the net assets over the acquisition-date fair value of the net assets of the subsidiary.

3.5 Investment in Associates

Investment in Associates has been accounted for using the Equity method as per IAS 28: Investment in Associates and Joint Ventures


4. Property Plant and EquipmentAs on June 30, 2019

Particulars Land Buildingand Other

Constructions

Plantand

Machinery

Furnitureand

Fixtures

Transportand

Vehicle

OfficeEquipment

Total

CostOpening July 01, 2018Additions Transferred in & CapitalizedDisposal during the Year

4,067,829,596

- - -

7,108,792,076

8,283,847 703,230,227

-

13,361,895,168 1,512,921,753

905,532,878 (21,845,168)

291,911,813 21,230,703 1,252,298

-

1,070,601,927

96,447,490 -

(22,146,945)

567,093,579 26,888,067 1,096,397 (102,600)

26,468,124,159 1,665,771,860 1,611,111,800

(44,094,713)

Cost at June 30, 2019 4,067,829,596 7,820,306,150 15,758,504,631 314,394,814 1,144,902,472 594,975,443 29,700,913,106

Accumulated DepreciationOpening at July 01, 2018Depreciation ChargedFair Value DepreciationAdjustment for Assets disposed off

- -- -

1,826,616,117 159,884,245

2,363,364 -

5,667,379,591

537,243,713 9,652,060

(8,555,677)

126,528,325 16,367,039

- -

585,682,478 107,546,037

-(19,354,938)

350,776,245 35,312,845

-(81,519)

8,556,982,756

856,353,879 12,015,424

(27,992,134)

Accumulated Depreciation at June 30, 2019 - 1,988,863,726 6,205,719,687 142,895,364 673,873,577 386,007,571 9,397,359,925

Net Book Value June 30, 2019 4,067,829,596 5,831,442,424 9,552,784,944 171,499,450 471,028,895 208,967,872 20,303,553,181

Capital Work in Progress 13,753,114,031

Carrying Value as on June 30, 2019 34,056,667,212


5. Intangible Assets

Particulars

Product development, Licensing and

Marketing Rights

ERP Project Trade Name & Trade Marks

Total

Cost As on July 01, 2018Addition During the year

1,210,988,617 108,963,430

147,447,850 19,655,852

54,000,000

-

1,412,436,467

128,619,282

As on June 30, 2019 1,319,952,047 167,103,702 54,000,000 1,541,055,749

AmortizationAs on July 01, 2018Amortized During the year

131,741,051 72,233,000

- -

-

2,160,000 131,741,051 74,393,000

As on June 30, 2019 203,974,051 - 2,160,000 206,134,051

Balance as on June 30, 2019 1,115,977,996 167,103,702 51,840,000 1,334,921,698

Balance as on June 30, 2018 1,079,247,566 147,447,850 54,000,000 1,280,695,416

Amount in Taka


6. Goodwill

This is carried forward from the previous year and relates to acquisition of Nuvista Pharma Limited (Note 3.4). There has been no indication of impairment of goodwill during the period.

7. Investment in Associates As at June 30, 2019

Balance as on June 30, 2018 30,749,850

Adjustment during the Year (1,424,130)

29,325,720

Less Share of accumulated loss (29,325,720)

Balance as on June 30, 2019 -

a. Beximco Pharmaceuticals Ltd. received 1,500,000 Ordinary Shares of Malaysian Ringgit (RM) 1 each representing 30% of the equity share of BioCare Manufacturing Sdn Bhd (“BioCare”), Malaysia. BPL provided full technical support to set up a manufacturing facility in Seri Iskandar Pharmaceutical Park, Perak, Malaysia and to produce specialized pharmaceutical products. BioCare is considered to be an associate of BPL as per IAS 28: Investment in Associates and Joint Ventures.

b. Accounting year of BioCare ends on December 31 which is different from the date of preparation of this Consolidated Statement of Financial Positions. BioCare has provided unaudited interim financial statements as of June 30, 2019. Total accumulated loss as on that date stands at RM 7,686,821 equivalent to BDT 155,504,389. An amount of Tk 29,325,720 being part of accumulated loss of BioCare has been accounted for in this consolidated financial statement. Beximco Pharma has not recognized an amount of Tk. 17,325,597 being remaining of the 30% share of accumulated loss of the BioCare following IAS 28: Investment in Associates and Joint Ventures as the company has no obligation for any liability beyond the value of its investment in associates.

c. The unrealized exchange fluctuation gain accounted for in previous financial statements has been reversed to arrive at cost value of investment.

8. Other Investments

a. Investment Datails (Taka)

Amount in Taka

Balance July 01, 2018

Addition/ Adjustment

BalanceJune 30, 2019

Unrealised Gain/(Loss)

(i) Bangladesh Export Import Co. Ltd. 4,188,358 (428,429) 3,759,929

(ii) Central Depository Bangladesh Ltd. (CDBL) 1,569,450 - 1,569,450

5,757,808 (428,429) 5,329,379

b. Number of Shares:


Addition/ Adjustment


Stock Dividend

(i) Bangladesh Export Import Co. Ltd. 159,861 7,993 167,854

(ii) Central Depository Bangladesh Ltd. (CDBL) 571,182 - 571,182

c. The shares of Bangladesh Export Import Co. Ltd. are listed in Dhaka and Chittagong Stock Exchanges. The market value of each share of Bangladesh Export Import Co. Ltd. on last working day of the year 2018-2019 was Tk. 22.40 (2017-2018: Tk.26.20). The amount of Tk. 428,429 represents fair value loss.

d. Shares of Central Depository Bangladesh Ltd. are not traded .


9. Inventories Amount in Taka

June 30, 2019 June 30, 2018

This consists of as follows :

Finished Goods 1,255,181,983 864,137,218

Work in Process 455,530,899 262,723,223

Raw Materials 2,710,825,646 2,183,474,721

Packing Materials 1,098,348,379 971,119,763

Laboratory Chemicals 44,838,125 27,979,741

Physician Samples 85,135,960 82,714,044

R&D Materials 12,004,065 324,655

Materials in Transit 262,166,621 666,374,316

5,924,031,678 5,058,847,681

10. Spares & Supplies


Spares & Accessories 579,021,056 545,032,936

Stock of Stationery 13,100,977 10,936,969

Laboratory Consumables 321,244 330,437

Spares in Transit 783,091 614,603

Literature & Promotional Materials 132,797,157 106,477,464

Miscellaneous Item 103,737 518,687

726,127,262 663,911,096

11. Accounts Receivable

This is net off provision for bad debts of Tk. 2,894,595. Accounts receivable includes an amount of Tk. 771,731,426 (equivalent USD 9,214,704 as on June 30, 2019 (June 30, 2018: Tk. 596,463,606, USD 7,190,640) against export sales. Part of the export sales receivables are against Letter of Credit while the rest are unsecured but considered good.

Accounts Receivable also includes Tk. 2,335,457,132 due from I & I Services Ltd., who provides distribution service to the Company and a “Related Party”. The maximum amount due from that company during the year was Tk. 2,348,527,632 on May 31, 2019.

No amount was due from the directors, managing agent, managers and other officers of the company and any of them severally or jointly with any other person.


12. Loans, Advances and Deposits Amount in Taka

June 30, 2019 June 30, 2018

This is unsecured, considered good and consists of as follows :

Clearing & Forwarding 159,119,478 162,932,842

VAT 329,321,836 219,639,030

Claims Receivable 6,320,466 19,642,831

Security Deposit & Earnest Money 67,972,220 50,467,768

Lease Deposit 10,821,850 17,600,613

Capital Expenditure/ Project 224,723,000 108,792,585

Expenses 255,058,852 133,241,320

Bank Guarantee Margin 37,773,704 27,004,835

Loan to Employees 155,890,739 120,493,363

Rent Advance 13,420,366 13,309,579

Motor Cycle 199,755,875 180,739,474

Raw & Packing Material 592,000,065 735,793,984

Prepaid Insurance 163,840,275 202,499,308

Overseas Liaison Office 35,318,373 32,698,675

Others 58,166,648 69,373,695

2,309,503,747 2,094,229,902

a. No amount was due from the directors, managing agent, managers and other officers of the company and any of them severally or jointly with any other person, except as stated above.

b. Prepaid insurance includes the insurance premium paid to German Export Credit Agency Euler Hermes Aktiengesellschaft, Hamburg for guarantee of the loan which is an integral part of the overseas loan financing agreement with ODDO BHF Aktiengesellshaft, Frankfurt, Germany. Expired prepaid insurance has been capitalized.

13. Short Term Investment This represents the Company’s temporary investment with Bangladesh Export Import Company Limited (Beximco Ltd.), carrying interest 1% above bank interest rate.

14. Cash and Cash Equivalents


(a) Cash in Hand (including Imprest Cash) 235,292,449 192,159,614

(b) Cash at Bank :

(i) Current & FC Account 338,805,413 167,102,855

(ii) FDR Account 36,396,437 34,473,477

610,494,299 393,735,946


C. Composition of Shareholding of Ordinary Shares:

June 30, 2019 June 30, 2018

No. of shares % of Share Capital

No. of shares

% of Share Capital

Sponsors: 8,235,353

8,254,632 37,019,789

2.03

2.04 9.13

8,235,353 8,254,632

36,999,784

2.03 2.04 9.12

A S F Rahman Salman F Rahman Other Director and Associates

53,509,774 13.19 53,489,769 13.19

Public Issue: -

GDRs- AIM of London Stock Exchange Foreign Investors’ Shareholdings ( DSE/CSE) Institutions (ICB, ICB Investors Accounts & Others) Individual Shareholders

90,943,627 60,060,586

136,573,957 64,468,501

22.42 14.81 33.68 15.90

90,943,627 74,469,959

119,603,843 67,049,247

22.42 18.36 29.49 16.53

352,046,671 86.81 352,066,676 86.81

405,556,445 100.00 405,556,445 100.00

16. Non-controlling Interest

Non-controlling Interest as on June 30, 2019:

Non-controlling Interest as on June 30, 2018 (NPL) 269,874,176 273,763,823

Proportionate profit/loss (NPL) 7,000,621 (3,889,647)

Less Cash Dividend (NPL) (868,344) -

Share Capital Beximco Pharma API Ltd.(API) 100 -

276,006,553 269,874,176

15. Issued Share Capital Amount in Taka

June 30, 2019 June 30, 2018

A. Authorized :

1,000,000,000 Ordinary Shares of Tk. 10/- each, (500,000,000 shares in June 2018 ) 10,000,000,000 5,000,000,000

50,000,000 fully con vertable 5 % Preference Shares of Tk. 100/- each,(41,000,000 shares in June 2018 )

5,000,000,000 4,100,000,000

15,000,000,000 9,100,000,000

B. Issued, Subscribed and Paid-up :

51,775,750 shares of Tk. 10/- each fully paid-up in cash 517,757,500 517,757,500

316,538,298 Bonus Shares of Tk. 10/- each 3,165,382,980 3,165,382,980

5,951,250 Shares of Tk. 10/- each issued in Exchange of Shares of Beximco Infusions Ltd.

59,512,500 59,512,500

31,291,147 Shares issued on conversion of Preference Shares 312,911,470 312,911,470

4,055,564,450 4,055,564,450

5,951,250 Ordinary Shares of Tk. 10 each were issued to the shareholders of Beximco infusions Ltd. on it’s merger with Beximco Pharmaceuticals Ltd. In 2005. 41,000,000 fully convertible 5% preference shares of Tk. 100 each were issued in 2009. 50% of the preference shares were converted into 16,169,191 ordinary shares of Tk. 10 each on February 1, 2010. The rest 50% were converted into 15,121,956 ordinary shares of Tk. 10 each on May 2, 2010.


17. Long Term Borrowings - Net of Current Maturity Amount in Taka

June 30, 2019 June 30, 2018

(a) This is arrived at as follows :

Project Loan - ODDO BHF Aktiengesellshaft, Frankfurt, Germany 1,974,611,879 2,809,556,317

Obligation Under Finance Leases 247,375,215 280,596,178

AB Bank 330,410,281 759,326,232

Dhaka Bank Ltd. 43,210,417 167,946,540

2,595,607,792 4,017,425,267

(b) Obligation Under Finance Leases

Gross Finance Lease - minimum lease Liability:

Within one year 217,547,491 260,426,903

Within two to five years 296,239,401 336,141,714

Total 513,786,892 596,568,617

Less future finance charges on finance lease liability (100,645,414) (114,965,180)

Present Value of Finance Lease liability 413,141,478 481,603,437

This consists of as follows:

Within one year 165,766,263 201,007,259


413,141,478 481,603,437

18. Liability for Gratuity and WPPF & Welfare Funds

Gratuity Payable 1,040,022,968 759,708,531

Workers Profit Participation and Welfare Fund 820,882,028 564,457,967

1,860,904,996 1,324,166,498

19. Short Term Borrowings

Janata Bank Ltd. - Cash Credit-Hypothecation Loan 5,336,101,392 3,897,681,180

AB Bank 2,491,112,625 -

Liability for UPAS Letter of credit 873,810,482 1,064,417,066

Dhaka Bank Ltd 571,476,781 617,381,902

The City Bank Ltd. - 2,507,475

Mutual Trust Bank Ltd. - 18,839,012

9,272,501,280 5,600,826,635

20. Long Term Borrowings-Current Maturity


Project Loan - ODDO BHF Aktiengesellshaft, Frankfurt, Germany 860,104,664 852,470,599


AB Bank 462,991,847 400,341,697

Dhaka Bank Ltd 127,807,775 115,170,190

1,616,670,549 1,568,989,745


Amount in Taka

21. Creditors and Other Payables June 30, 2019 June 30, 2018

Goods & Services 573,345,769 621,334,927

Provident Fund 403,722,991 188,151,262

Advance Against Sales 23,952,936 43,576,730

Others 90,788,026 138,649,988

1,091,809,722 991,712,907

22. Accrued Expenses

This is unsecured, falling due within one year and consists of as follows :

For Expenses 389,379,916 251,493,606

Workers’ Profit Participation and Welfare Funds - current year’s expense 200,937,234 166,983,289

590,317,150 418,476,895

23. Net Revenue July 2018- June 2019

July 2017- June 2018

Domestic Sales 20,300,942,074 16,237,454,376

Export 2,502,632,517 1,476,977,889

Toll Income 13,055,204 2,284,590

22,816,629,795 17,716,716,855

24. Cost of Goods Sold

This is made-up as follows :

Work-in-Process - Opening /at the date of acquisition 262,723,223 155,553,707

Materials Consumed (Note: 25) 9,840,645,571 7,236,638,335

Factory Overhead (Note: 26) 3,165,298,448 2,554,986,926

Total Manufacturing Cost 13,268,667,242 9,947,178,968

Work-in-Process (Closing) (455,530,899) (262,723,223)

Cost of Goods Manufactured 12,813,136,343 9,684,455,745

Finished Goods - Opening /at the date of acquisition 864,137,218 803,975,989

Finished Goods available 13,677,273,561 10,488,431,734

Cost of Physician Sample transferred to Sample Stock (225,804,808) (193,557,085)

Finished Goods (Closing) (1,255,181,983) (864,137,218)

12,196,286,770 9,430,737,431

25. Materials Consumed


Opening Stock 3,182,574,225 1,920,966,484

Purchase 10,512,083,496 8,498,246,076

Closing Stock (3,854,012,150) (3,182,574,225)

9,840,645,571 7,236,638,335


Amount in Taka

26. Factory Overhead July 2018- June 2019


Salary & Allowances 1,188,378,116 904,509,549

Repairs and Maintenance 357,815,843 216,587,905

Insurance Premium 31,563,027 22,801,790

Municipal Tax & Land Revenue 2,340,256 4,508,685

Advertisement 39,992 196,960

Registration & Renewals 12,214,261 13,724,885

Travelling & Conveyance 13,607,099 9,764,755

Entertainment 2,406,063 1,821,636

Research and Development 284,160,790 222,652,875

Printing & Stationery 30,586,880 22,091,508

Telephone, Internet & Postage 9,563,197 9,211,158

Toll Expense 211,045,966 207,961,293

Electricity, Gas & Water 185,846,861 144,124,432

Training & Conference 5,847,370 4,961,417

Plant Certification and Regulatory Approvals 26,970,395 26,780,147

Depreciation 776,720,982 720,995,025

Security Expenses 19,223,665 15,870,697

Other Expenses 6,967,685 6,422,209

3,165,298,448 2,554,986,926

27. Administrative Expenses

Salary & Allowances 422,172,373 314,685,553

Rent 21,596,203 13,754,553




Entertainment 7,452,594 6,829,212


Audit Fee 2,090,000 1,628,750

Local Authority Taxes 1,294,203 913,142

Insurance Premium 420,402 153,958

Bank Charges 14,475 33,534



Legal & Consultancy 10,931,928 8,659,820

Business Acquisition Cost 2,876,555 12,619,081

Company Secretarial, Regulatory Fee and AGM Expense 27,156,197 32,250,219



Depreciation 29,897,226 28,060,048

Board Meeting Attendance Fee 1,108,950 603,564


Other Expenses 73,659,561 68,042,059

752,944,182 618,675,127


28. Selling, Marketing and Distribution Expenses Amount in Taka



Salary & Allowances 1,746,110,649 1,262,270,771

Rent 86,475,238 78,267,019



Entertainment 54,522,468 53,419,672




Market Research & New Products 49,463,151 49,081,984



Sample Expense 286,686,387 263,875,222

Sales & Market Promotion Expenses 511,507,793 428,361,958

Pharmacovigilance 11,394,312 10,893,311

Literature/News Letter 207,829,781 128,243,083


Export Insurance, Freight and C&F Expenses 273,539,867 120,383,504

Distribution Commission 260,673,378 234,392,430

Delivery Expense 315,948,856 179,142,387

Depreciation & Amortization 136,144,095 96,854,086


Bad Debts 2,894,595 -

Other Expenses 3,493,457 12,520,028

4,801,225,276 3,641,136,313

29. Other Income

Interest Income 36,457,527 54,928,425

Dividend Income 1,491,901 1,504,092

Royalty 95,941,689 6,093,728

Technology Transfer Income - 18,145,620

Income From sale of Product Dossier - 4,959,000

Distribution Commission - 4,266,424

Cash Incentive on Export 23,646,180 -

Exchange Rate Fluctuation Gain / (Loss)* (20,010,341) (42,662,242)

Sale of Miscellaneous Item 952,663 49,772

Profit/(Loss) on Sale of Fixed Assets 1,438,046 (3,526,939)

139,917,665 43,757,880

* Exchange rate fluctuation gains has been netted off with the Exchange rate fluctuation losses. An exchange loss of Tk. 25,559,859 has been accounted for the translation of outstanding foreign currency loan from ODDO BHF Aktiengesellshaft, Frankfurt, Germany translated at the exchange rate prevailing on the financial position date.


Amount in Taka

30. Finance Cost July 2018- June 2019


Interest on Working Capital Loan 797,139,744 378,949,336

Interest on Long Term Loan 27,718,969 (10,909,700)

Interest on Lease Finance 60,109,947 73,787,122

Interest on Loan from PF, WPPF & Welfare Fund 128,075,983 85,080,425

Other Bank Charges 16,717,899 13,376,260

1,029,762,542 540,283,443

31. Income Tax ExpensesThis consists of as follows :

(a) Current Tax 803,760,846 792,620,241

(b) Deferred Tax Expense 101,901,936 36,059,589

905,662,782 828,679,830

32. Earnings Per Share (EPS)

(a) Earnings attributable to the Owners of the Company 3,033,402,333 2,536,543,948

(b) Weighted average number of Shares outstanding during the year 405,556,445 405,556,445

Earnings Per Share (EPS) 7.48 6.25

33. Net Asset Value (NAV) Per Share June 30, 2019 June 30, 2018

Total Assets 49,214,092,360 43,738,886,412

Less Total Liabilities (19,349,768,523) (16,387,049,620)

Less Non-controlling Interest (276,006,553) (269,874,176)

Equity Attributable to the Owners of the Company 29,588,317,284 27,081,962,616

Number of Ordinary Shares at Financial Position date 405,556,445 405,556,445

Net Asset Value (NAV) Per Share 72.96 66.78

34. Net Operating Cash Flow Per Share (NOCFPS) July 2018-

June 2019 July 2017- June 2018

Net Cash Generated from Operating Activities 2,959,916,904 1,819,113,923


Net Operating Cash Flow Per Share (NOCFPS) 7.30 4.49


35. Reconciliation of Net Profit with Cash Flows from Operating Activities Amount in Taka



Profit after Tax 3,040,402,954 2,532,654,301

Adjustment to reconcile net profit to net cash provided by operating activities :

(a) Non-cash Expenses : 1,606,962,596 970,984,130

Depreciation 868,369,303 801,715,192

Amortization 74,393,000 44,193,967

Gratuity & WPPF 536,738,498 57,650,531

Technology Transfer Income -BioCare Manufacturing SDN. BHD. , Malaysia

- (18,145,620)

Exchange rate fluctuation loss on Foreign Currency Bank Loan 25,559,859 49,510,471

Deferred Tax 101,901,936 36,059,589

(b) Non-operating Items 26,190,223 2,022,847

Dividend Income (1,481,833) (1,504,092)

Profit on sale of Fixed Assets (1,438,046) 3,526,939

Effect of exchange rate changes on Cash and Cash Equivalents (215,618) -

Share of Loss of Associates 29,325,720 -

(c) Changes in working Capital (1,713,638,869) (1,686,547,355)

(Increase)/Decrease in Inventories (865,183,997) (1,192,022,631)

(Increase)/Decrease in Spares & Supplies (62,216,166) (18,678,378)

(Increase)/Decrease in Accounts Receivable (573,449,512) (566,040,570)

(Increase)/Decrease in Advance Income Tax (3,112,607) -

(Increase)/Decrease in Loans, Advances & Deposits (215,273,845) (365,849,712)

(Increase)/Decrease in Other Non-current Assets (221,598) -

Increase/(Decrease) in Creditors and Other Payables 100,096,815 403,748,186

Increase/(Decrease) in Accrued Expenses 171,840,255 41,306,104

Increase/(Decrease) in Income Tax Payable (266,118,214) 10,989,646

Net cash Generated from Operating Activities 2,959,916,904 1,819,113,923


36. Related Party Disclosures Amount in Taka

a) Following transactions were carried out with related parties in the normal course of business on arms length basis:

Name of Related Parties Nature of Transactions Value of Transaction Balance at year end

(i) I & I Services Ltd. Local Delivery Distribution Commission

22,217,416,177 260,673,378

2,335,457,132

(ii) Bangladesh Export Import Co. Ltd Short Term Investment & Interest there on 16,032,638 323,364,536

b. Related party transaction between the Company and its subsidiaries have been eliminated in the consolidation.

c. The Companies are subject to common control from same source.






Beximco Pharmaceuticals Limited Audited Financial Statements

For the Year Ended June 30, 2019

Financial Statements-Beximco Pharma Stand-alone

Independent Auditor’s ReportTo the Shareholders of Beximco Pharmaceuticals Limited Report on the Audit of the Financial Statements

Opinion We have audited the financial statements of Beximco Pharmaceuticals Limited (the “Company”), which comprise the Statement of Financial Position as at 30 June 2019 and Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in Equity and Statement of Cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements of the Company give a true and fair view of the financial position of the Company as at 30 June 2019, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Bangladesh, and we have fulfilled our other ethical responsibilities in accordance with these ethical requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Risk Our response to the risk

Valuation of Property, Plant and Equipment (PPE)

The carrying value of the PPE was Tk. 32,209,440,044 as at 30 June, 2019.

Expenditures are capitalized if they create new assets or enhance the existing assets, and expensed if they relate to repair or maintenance of the assets. Classification of the expenditures involves judgment. The useful lives of PPE items are based on management’s estimates regarding the period during which the assets or its significant components will be used. The estimates are based on historical experience and market practice and take into consideration the physical condition of the assets. The valuation of PPE was identified as a key audit matter due to the significance of this balance to the financial statements and that there is significant measurement uncertainty involved in this valuation.

See Note No. 4(a) to the financial statements

Our audit included the following procedure: • We assessed whether the accounting policies in relation to the capitalization of expenditures are in compliance with IFRS and found them to be consistent. • We inspected a sample of invoices and L/C documents to determine whether the classification between capital and revenue expenditure was appropriate. •We evaluated whether the useful lives determined and applied by the management were in line with historical experience and the market practice.

We checked whether the depreciation of PPE items was commenced timely, by comparing the date of the reclassification from capital work in progress to ready for use, with the date of the act of completion of the work.

Valuation of Inventory

Contingent Liabilities

Related party transactions

The inventory of Tk. 5,573,549,171 as at 30 June, 2019 was held at different locations across the country.

Inventories are carried at the lower of cost and net realizable value. As a result, the management apply judgment in determining the appropriate values for slow-moving or obsolete items.

Since the value of Inventory is significant to the Financial Statements and there is significant measurement uncertainty involved in this valuation, the valuation of inventory was significant to our audit.See Note No. 9 to the financial statements.

The Company is subject to a number of claims and litigations. The amounts of claims are significant and estimates of the amounts of provisions or contingent liabilities are subject to management judgement. These claims and regulatory matters are uncertain in timing of resolutions and amount or consequences.

These claims and litigation matters were a key audit matter due to the amounts involved, potential consequences and the inherent difficulty in assessing the outcome. The assessment of whether or not a liability should be recognized involves judgement from management.

The Company has related party transactions with its subsidiaries and other related parties as described in Note No. 40 of the financial statements.

We focused on identification of related parties and disclosure of related party transactions in accordance with relevant accounting standards.

We verified the appropriateness of management’s assumptions applied in calculating the value of the inventory by:• Evaluating the design and implementation of key inventory controls.• Attending inventory counts on sample basis and reconciling the count results to the inventory listing to test the completeness of data.• Reviewing the requirement of inventory provisioning and action there upon by the management.• Comparing the net realizable value obtained through a detailed review of sales subsequent to the year-end, to the cost price of a sample of inventories.

We obtained an understanding, evaluated the design and tested the operational effectiveness of the company’s key controls over the legal provision and contingency processes.

We enquired to those charged with governance to obtain their view on the status of the litigations.We enquired of the company’s internal legal counsel for the litigation and inspected internal notes and reports. We also reviewed formal confirmations in this regard from external counsel.

We also validated the completeness and appropriateness of the related disclosures in Note No. 51 of the financial statements.

Our audit procedures amongst others included the following:• Evaluated the design and tested the operating effectiveness of controls over identification and disclosure of related party transactions.

• Evaluated the transactions among the related parties and tested material accounts balances.

• Evaluated the disclosures in the financial statements in compliance with IAS 24.

Other Information

Management is responsible for the other information. The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The Annual Report is expected to be made available to us after the date of this auditor’s report.Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.


In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on such work we perform, we conclude that there is a material misstatement of this other information, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Financial Statements and Internal Controls

Management is responsible for the preparation and fair presentation of the financial statements of the Company in accordance with IFRSs, the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal controls of the Company.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding


independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.


In accordance with the Companies Act 1994, The Securities and Exchange Rules 1987 and relevant notifications issued by Bangladesh Securities and Exchange Commission, we also report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof;

b) In our opinion, proper books of accounts as required by law have been kept by the company so far as it appeared from our examination of those books;c) The company’s Statement of Financial Position (Balance sheet) and Statement of Profit or Loss and Other Comprehensive Income (Profit & Loss Account) dealt with by this report are in agreement with the books of accounts and;d) The expenditures incurred and payment made were for the purpose of the company’s business for the year.

M. J. Abedin & Co. Chartered Accountants



Beximco Pharmaceuticals LimitedStatement of Financial PositionAs at June 30, 2019 Amount in Taka

Notes June 30, 2019 June 30, 2018

ASSETS

Non-Current Assets 34,999,402,741 31,332,493,872

Property, Plant and Equipment- Carrying Value 4 (a) 32,209,440,044 28,645,104,798

Intangible Assets 5 610,121,698 525,695,416

Investment in Subsidiaries 6 2,145,185,900 2,125,186,000

Investment In Associates 7 29,325,720 30,749,850

Other Investment 8 5,329,379 5,757,808

Current Assets 12,793,492,489 10,832,521,567

Inventories 9 5,573,549,171 4,665,449,461

Spares & Supplies 10 715,341,316 654,781,270

Accounts Receivable 11 3,325,890,597 2,736,944,147

Loans, Advances and Deposits 12 2,273,040,821 2,066,840,961

Short Term Investment 13 323,364,536 339,397,174

Cash and Cash Equivalents 14 582,306,048 369,108,554

TOTAL ASSETS 47,792,895,230 42,165,015,439

EQUITY AND LIABILITIES

Shareholders’ Equity 29,600,843,240 27,104,389,931

Issued Share Capital 15 4,055,564,450 4,055,564,450

Share Premium 5,269,474,690 5,269,474,690

Excess of Issue Price over Face Value of GDRs 16 1,689,636,958 1,689,636,958

Capital Reserve on Merger 294,950,950 294,950,950

Revaluation Surplus 4(b) 1,131,853,004 1,159,277,845

Unrealized Gain/(Loss) 2,504,203 4,356,762

Retained Earnings 17,156,858,985 14,631,128,276

Non-Current Liabilities 6,296,204,472 6,963,764,382

Long Term Borrowings-Net of Current Maturity 17 2,544,732,500 3,849,478,727

Liability for Gratuity and WPPF & Welfare Funds 18 1,748,900,794 1,224,462,270

Deferred Tax Liability 19 2,002,571,178 1,889,823,385

Current Liabilities and Provisions 11,895,847,518 8,096,861,126

Short Term Borrowings 20 8,701,024,499 4,962,098,246

Long Term Borrowings-Current Maturity 21 1,487,254,413 1,453,819,555

Creditors and Other Payables 22 1,037,089,244 939,538,235

Accrued Expenses 23 496,178,291 303,447,824

Dividend Payable 7,002,833 4,540,814

Income Tax Payable 24 167,298,238 433,416,452

TOTAL EQUITY AND LIABILITIES 47,792,895,230 42,165,015,439









Beximco Pharmaceuticals LimitedStatement of Profit or Loss and Other Comprehensive Income For the Year ended June 30, 2019

Amount in Taka

Notes July 2018 -

June 2019 July 2017 - June 2018

Net Sales Revenue 25 21,156,331,039 17,380,728,001

Cost of Goods Sold 26 (11,365,929,686) (9,255,504,681)

Gross Profit 9,790,401,353 8,125,223,320

Operating Expenses (4,991,627,668) (4,143,623,455)

Administrative Expenses 29 (663,362,904) (595,185,629)

Selling, Marketing and Distribution Expenses 30 (4,328,264,764) (3,548,437,826)

Profit from Operations 4,798,773,685 3,981,599,865

Other Income 31 245,184,534 64,973,584

Finance Cost 32 (938,074,846) (512,099,369)

Profit Before Contribution to WPPF & Welfare Funds 4,105,883,373 3,534,474,080

Contribution to WPPF & Welfare Funds 33 (195,518,256) (168,308,290)

Profit Before Tax 3,910,365,117 3,366,165,790

Income Tax Expenses 34 (886,864,143) (807,194,527)

Current Tax (792,365,900) (790,580,483)

Deferred Tax Income/ (Expense) (94,498,243) (16,614,044)

Profit after Tax for the Year 3,023,500,974 2,558,971,263

Other Comprehensive Income - Unrealized Gain/(Loss) 35 (1,852,559) 481,697

Total Comprehensive Income for the Year 3,021,648,415 2,559,452,960

Earnings Per Share (EPS) 36 7.46 6.31









Amount in Taka

Share Capital

Share Premium

Excess of Issue Price over Face Value of GDRs

Capital Reserve on

Merger

Revaluation Surplus


Retained Earnings

Total

Balance as on July 01, 2018 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,159,277,845 4,356,762 14,631,128,276 27,104,389,931

Total Comprehensive Income for the year:Profit for the YearOther Comprehensive Income/(Loss)

- -

- -

-

-

-

-

-

-

-

(1,852,559)3,023,500,974

-

3,023,500,974 (1,852,559)


Cash Dividend - - - - - - (506,945,556) (506,945,556)

Adjustment for the Depreciation on Revalued Assets

-

-

- - (9,175,291)

- 9,175,291

-

Adjustment for Deferred Tax on Revalued Assets -

-

-

- (18,249,550) - - (18,249,550)

Balance as on June 30 ,2019 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,131,853,004 2,504,203 17,156,858,985 29,600,843,240


For the Year ended June 30, 2018

Share Capital

Share Premium

Excess of Issue Price over Face Value of GDRs

Capital Reserve on

Merger

Revaluation Surplus


Retained Earnings

Total

Balance as on July 01, 2017 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,190,203,818 3,875,065 12,568,719,969 25,072,425,900

Total Comprehensive Income for the year:Profit for the YearOther Comprehensive Income

- -

- -

- -

-

-

-

-

- 481,697

2,558,971,263 -

2,558,971,263 481,697


Cash Dividend - - - - - - (506,945,556) (506,945,556)

Adjustment for the Depreciation on Revalued Assets

- - -

- (10,382,600)

- 10,382,600 -

Adjustment for Deferred Tax on Revalued Assets - - -

- (20,543,373)

-

- (20,543,373)

Balance as on June 30, 2018 4,055,564,450 5,269,474,690 1,689,636,958 294,950,950 1,159,277,845 4,356,762 14,631,128,276 27,104,389,931


The Notes are an integral part of the Financial Statements.Approved and authorised for issue by the Board of Directors on October 28, 2019 and signed for and on behalf of the Board :

Beximco Pharmaceuticals LimitedStatement of Changes in EquityFor the Year ended June 30, 2019







Beximco Pharmaceuticals LimitedStatement of Cash Flows For the Year ended June 30, 2019 Amount in Taka

Notes July 2018 -

June 2019 July 2017 -

June 2018

Cash Flows from Operating Activities :

Receipts from Customers and Others 20,798,619,790 16,851,875,991

Payments to Suppliers and Employees (16,112,060,651) (13,768,549,304)

Cash Generated from Operations 4,686,559,139 3,083,326,687

Interest Paid (938,074,846) (512,099,369)

Interest Received 36,457,527 54,928,425

Income Tax Paid (1,058,484,114) (778,088,709)

Net Cash Generated from Operating Activities 39 2,726,457,706 1,848,067,034

Cash Flows from Investing Activities :

Acquisition of Property, Plant and Equipment (4,337,220,303) (4,947,915,606)

Intangible Assets (128,619,282) (106,921,036)

Investment in Subsidiary (19,999,900) (2,125,186,000)

Disposal of Property, Plant and Equipment 17,267,628 1,354,100

Dividend Received 1,491,901 1,504,092

Decrease in Short Term Investment 16,032,638 547,179,732

Net Cash Used in Investing Activities (4,451,047,318) (6,629,984,718)

Cash Flows from Financing Activities :

Net Increase /(Decrease) in Long Term Borrowings (1,296,871,228) 1,902,090,586

Net Increase/(Decrease) in Short Term Borrowings 3,738,926,253 3,476,665,586

Dividend Paid (504,483,537) (502,757,959)

Net Cash Generated from Financing Activities 1,937,571,488 4,875,998,213

Increase/(Decrease) in Cash and Cash Equivalents 212,981,876 94,080,529

Cash and Cash Equivalents at Beginning of Year 369,108,554 275,028,025

Effect of exchange rate changes on Cash and Cash Equivalents 215,618 -

Cash and Cash Equivalents at End of Year 14 582,306,048 369,108,554

Net Operating Cash Flow Per Share 38 6.72 4.56









Beximco Pharmaceuticals LimitedNotes to the Financial StatementsAs at and for the year ended June 30, 2019

1. Reporting entity

1.1. About the companyBeximco Pharmaceuticals Limited (BPL/ the Company) was incorporated as a public limited company in Bangladesh in 1976 and commenced its manufacturing operation in 1980. It is a leading manufacturer of pharmaceutical formulations and Active Pharmaceutical Ingredients (APIs). The Company was listed with Dhaka Stock Exchange in 1985 and with Chittagong Stock Exchange on its debut in 1995. In 2005, BPL took over Beximco Infusions Ltd., a listed company engaged in manufacturing and marketing of intravenous fluids and got enlisted with the Alternative Investment Market (AIM) of the London Stock Exchange through issuance of Global Depository Receipts (GDRs). In 2018, BPL acquired 85.22% shares of Nuvista Pharma Limited – a non-listed pharmaceutical company in Bangladesh specializing in hormones and steroid drugs and took over control of its management. Shares of the Company are traded in Dhaka and Chittagong Stock Exchanges of Bangladesh and its GDRs in AIM of the London Stock Exchange.

The registered office of the company is located at House No. 17, Road No. 2, Dhanmondi R/A, Dhaka. The industrial units are located at Tongi and Kaliakoir of Gazipur district – vicinities close to the capital city Dhaka. The manufacturing facilities of the Company are certified by leading global regulatory authorities including United States Food and Drug Administration (USFDA).

1.2. Nature of BusinessThe company is engaged in manufacturing and marketing of generic pharmaceuticals formulation products covering a wide range of therapeutic categories. It offers products in different dosage forms including Solid, Liquid, Cream and Ointment, Suppositories, Metered Dose Inhaler, Dry Powder Inhaler, Nasal Spray, Sterile, Lyophilized Injectable, Large Volume Intravenous Fluids. Besides formulation products BPL also manufactures Active Pharmaceutical Ingredients (APIs) and renders contract manufacturing services to other companies. Products of the company are sold in domestic and international markets.

2. Basis of Preparation of Financial Statements

2.1. Basis of MeasurementThe financial statements have been prepared on Historical Cost Basis except land, building and plant & machinery being revalued on 31 December 2008, investment in shares of listed company being valued at year end quoted price and the cash flow statement being prepared on cash basis.

2.2. Statement of ComplianceThe financial statements have been prepared in compliance with the requirements of the Companies Act, 1994, the Securities & Exchange Rules 1987, the Listing Regulations of Dhaka and Chittagong Stock Exchanges and other relevant local laws as applicable and in accordance with the International Financial Reporting Standards (IFRSs).

2.3. Presentation of Financial StatementsThe presentation of the financial statements is in accordance with the guidelines provided by IAS 1: Presentation of Financial Statements.

The financial statements comprises of:(a) a Statement of Financial Position as at the end of the year June 30, 2019;(b) a Statement of Profit or Loss and Other Comprehensive Income for the year ended June 30, 2019;(c) a Statement of Changes in Equity for the year ended June 30, 2019;(d) a Statement of Cash Flows for the year ended June 30, 2019; and(e) notes, comprising summary of significant accounting policies and explanatory information.

2.4. Reporting Period and Comparative InformationThe Financial statements cover 12 months period starting from July 1, 2018 to June 30, 2019. The last audited financial statements were prepared for the year ending June 30, 2018. Figures for earlier year have been re-arranged wherever considered necessary to ensure better comparability with the current year.

2.5. Authorization for issueThe financial statements have been authorized for issue by the Board of Directors on October 28, 2019.

2.6. Functional and Presentation CurrencyThe financial statements are prepared and presented in Bangladesh Currency (Taka), which is the company’s functional currency. All financial information presented has been rounded off to the nearest Taka except where indicated otherwise.

2.7. Use of Estimates and JudgmentsThe preparation of financial statements in conformity with the IFRSs including IASs require management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses, and for contingent assets and liabilities that require disclosure, during and at the date of the financial statements.

Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision of accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.

In particular, the key areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements include depreciation, inventory valuation accrued expenses, others payable, capitalization of assets and deferred liability for gratuity.

3. Significant Accounting Policies

The accounting principles and policies in respect of material items of financial statements set out below have been applied consistently to all periods presented in these financial statements.

3.1. Revenue from Contracts with CustomersIn compliance with the requirements of IFRS 15: Revenue from Contracts with Customers, revenue receipts from customers against sales is recognized when products are dispatched to customers, that is, when the significant risk and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods.Revenue from sale of goods is measured at the fair value of the consideration received or receivable net of returns and allowances, trade discounts, rebates and Value Added Tax (VAT).

3.2. Property, Plant and Equipment (PP&E)

3.2.1. Recognition and MeasurementThis has been stated at cost or revalued amount less accumulated depreciation in compliance with the requirements of IAS 16: Property, Plant and Equipment. The cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the assets to its working condition for its intended use inclusive of inward freight, duties and non-refundable taxes.

3.2.2. Maintenance ActivitiesThe company incurs maintenance costs for all its major items of property, plant and equipment. Repair and maintenance costs are charged as expenses when incurred.

3.2.3. DepreciationDepreciation is provided to amortize the cost of the assets after commissioning, over the period of their expected useful lives, in accordance with the provisions of IAS 16: Property, Plant and Equipment. Depreciation is provided at the following rates on reducing balance basis:

Building and Other Construction Plant and Machinery Furniture & Fixtures Transport & Vehicle Office Equipment

3.2.4. Retirements and DisposalsOn disposal of fixed assets, the cost and accumulated depreciation are eliminated and gain or loss on such disposal is reflected in the income statement, which is determined with reference to the net book value of the assets and net sales proceeds.

3.3. Intangible AssetsIntangible assets are stated at cost less provisions for amortization and impairments. Licenses, patents, know-how and marketing rights

2% - 10%5% - 15%

10%20%

10% - 15%


acquired are amortized over their estimated useful lives, using the straight line basis, from the time they are available for use. The cost of acquiring software for internal use are capitalized as intangible fixed assets where the software supports a significant business system and the expenditure leads to the creation of a durable asset. Also, the research and development expenditures that are definite to yield benefit to the company are capitalized.

3.4. LeasesA new Standard IFRS 16: Leases, has been made effective for the reporting period beginning on or after 1 January 2019. The new standard has introduced a single on-balance sheet lease accounting model for leases and replaces the previously adopted IAS 17: Leases.The Company has been consistently recording its underlying assets acquired under lease arrangement as Assets and the corresponding obligation as Liabilities in the financial statements. Lease payments made are apportioned between the finance expenses and the reduction of outstanding lease liability which are in compliance with IFRS 16, excepting the classification of the leased assets as “Right-of-use assets” in the Statement of Financial Position.The Company has not early adopted IFRS 16 in preparing the financial statements and intends to do so when it becomes effective for the Company. This however, has no material impact on the reported financial statements.

3.5. Financial InstrumentsA financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

3.5.1. Financial assetsFinancial assets of the company include cash and cash equivalents, accounts receivable and other receivables. The company initially recognizes receivable on the date they are originated. All others financial assets are recognized initially on the date at which the company becomes a party to the contractual provisions of the transaction. The company derecognizes a financial asset when, and only when the contractual rights or probabilities of receiving the cash flows from the asset expire or it transfer the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risk and rewards of ownership of the financial asset are transferred.

3.5.1. (a) Accounts ReceivableAccounts receivable are created at original invoice amount less any provisions for doubtful debts. Provisions are made where there is evidence of a risk of non-payment, taking into account aging, previous experience and general economic conditions. When an accounts receivable is determined to be uncollected it is written off, firstly against any provision available and then to the profit and loss account. Subsequent recoveries of amounts previously provided for are credited to the profit and loss account.

3.5.1. (b) Cash and Cash EquivalentsCash and cash equivalents include cash in hand, in transit and with banks on current and deposit accounts which are held and available for use by the company without any restriction. There is insignificant risk of change in value of the same.

3.5.1. (c) Investment in SharesInvestment in shares of listed company is valued at a price quoted in the stock exchange at year end. Investment in other shares is valued at cost.

3.5.2. Financial LiabilityFinancial liabilities are recognized initially on the transaction date at which the company becomes a party to the contractual provisions of the liability. The company derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire. Finance liabilities include payable for expenses, liability for capital expenditure and other current liabilities.

3.6. Impairment3.6.1. Financial AssetsAccounts receivable and other receivables are assessed at each reporting date to determine whether there is any objective evidence of impairment. Financial assets are impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset and that the loss event had a negative effects on the estimated future cash flows of that asset, that can be estimated reliably. Objective evidence that financial assets are impaired can include default or delinquency by a debtor, indications that a debtor or issuer will enter bankruptcy etc.

3.6.2. Non-Financial AssetsAn asset is impaired when its carrying amount exceeds its recoverable amount. The company assesses at each reporting date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Carrying amount of the assets is reduced to its recoverable amount by recognizing an impairment loss if, and only if, the recoverable amount of the asset is less than its carrying amount. Impairment loss is recognized immediately in profit or loss, unless the asset is carried at revalued amount. Any

impairment loss of a revalued asset shall be treated as a revaluation decrease.

3.7. InventoriesInventories are carried at the lower of cost and net realizable value as prescribed by IAS 2: Inventories. Cost is determined on weighted average cost basis. The cost of inventories comprises of expenditure incurred in the normal course of business in bringing the inventories to their present location and condition. Net realizable value is based on estimated selling price less any further costs expected to be incurred to make the sale.

3.8. ProvisionsA provision is recognized in the statement of financial position when the company has a legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provision is ordinarily measured at the best estimate of the expenditure required to settle the present obligation at the date of statement of financial position. Where the effect of time value of money is material, the amount of provision is measured at the present value of the expenditures expected to be required to settle the obligation.

3.9. Income Tax ExpenseIncome tax expense comprises of current and deferred tax. Income tax expense is recognized in the Statement of Profit or Loss and Other Comprehensive Income and accounted for in accordance with the requirements of IAS 12: Income Taxes.

Current TaxCurrent tax is the expected tax payable on the taxable income for the year, and any adjustment to tax payable in respect of previous years. The company qualifies as a “Publicly Traded Company”; hence the applicable Tax Rate is 25%. However, profit generated from export is subject to a reduced 12.5% tax. Additionally certain other incomes are also liable to a lower rates which can be found in Note: 34

Deferred TaxThe company has recognized deferred tax using balance sheet method in compliance with the provisions of IAS 12: Income Taxes. The company’s policy of recognition of deferred tax assets/ liabilities is based on temporary differences (Taxable or deductible) between the carrying amount (Book value) of assets and liabilities for financial reporting purpose and its tax base, and accordingly, deferred tax income/expenses has been considered to determine net profit after tax and earnings per shares (EPS). In BPL’s case deferred tax arises due to the difference in the carrying amount and the tax base value of the Property, Plant & Equipment and Gratuity provisions.

A deferred tax asset is recognized to the extent that it is probable that future taxable profit will be available, against which temporary differences can be utilized. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realized.

3.10. Other IncomeDividendCash dividend income on investment in shares is recognized on approval of said dividend in the annual general meeting. Stock dividend income (Bonus Shares) is not considered as revenue.Export IncentivesCash Incentives for export are recognized when all conditions as laid done in the relevant incentive scheme including receipt of export remittances are satisfied and the right to claim the incentives are established RoyaltyRoyalty income is accounted for on accrual basis on fulfillment of the terms laid in the agreement between the contracting parties giving BPL the right to claim the Royalty. Toll IncomeToll income is recognized when services are delivered and there remains no unfulfilled obligation in connection with the service. Interest IncomeInterest income is recognized on accrual basis.

3.11. Borrowing CostBorrowing costs are recognized as expenses in the period in which they are incurred excepting those that qualifies for capitalization under IAS 23: Borrowing Costs.

3.12. Employee BenefitsThe company maintains both defined contribution plan and defined benefit plan for its eligible permanent employees. The eligibility is determined according to the terms and conditions set forth in the respective deeds.

The company has accounted for and disclosed employee benefits in compliance with the provisions of IAS 19: Employee Benefits. The cost of employee benefits is charged off as revenue expenditure in the period to which the contributions relate. The company’s employee benefits include the following:

3.12.1. Defined Contribution Plan (Provident Fund)The company has a registered provident fund scheme (Defined Contribution Plan) for employees of the company eligible to be members of the fund in accordance with the rules of the provident fund constituted under an irrevocable trust. Employees contribute 10% of their basic salary to the provident along with the Company that makes an equal contribution.The company recognizes contribution to defined contribution plan as an expense when an employee has rendered services in exchange for such contribution. The legal and constructive obligation is limited to the amount it agrees to contribute to the fund.

3.12.2. Defined Benefit Plan (Gratuity)This represents unfunded gratuity scheme for its permanent employees. Though no valuation was done to quantify actuarial liabilities as per the IAS 19: Employee Benefits, such valuation is not likely to yield a result significantly different from the current provision.

3.12.3. Contribution to Workers’ Profit Participation and Welfare FundsThis represents 5% of net profit before tax contributed by the company as per provisions of the Bangladesh Labor (amendment) Act 2013 and is payable to workers as defined in the said law.

3.12.4. Short-term employee benefitsShort-term employee benefits include salaries, bonuses, leave encashment, etc. Obligations for such benefits are measured on an undiscounted basis and are expensed as the related service is provided.

3.12.5. Insurance SchemeEmployees of the company are covered under insurance schemes.

3.13. Share PremiumThe Share Premium shall be utilized in accordance with the provisions of the Companies Act, 1994 and as per direction of the Securities and Exchange Commission in this respect.

3.14. Proposed DividendThe amount of proposed dividend is not accounted for but disclosed in the notes to the accounts in accordance with the requirements of the International Accounting Standard (IAS) 1: Presentation of Financial Statements. Also the proposed dividend is not considered as liability in accordance with the requirement of International Accounting Standard (IAS) 10: Events After The Reporting Period, because no obligation exists at the time of approval of accounts and recommendation of dividend by the Board of Directors.

3.15. Earnings per Share (EPS)This has been calculated in compliance with the requirements of IAS 33: Earnings Per Share by dividing the basic earnings by the weighted average number of ordinary shares outstanding during the year.

Diluted Earnings per ShareNo diluted EPS is required to be calculated for the year as there was no scope for dilution during the year under review.

3.16. Foreign Currency TransactionsForeign currency transactions are recorded at the applicable rates of exchange ruling at the transaction date.

The monetary assets and liabilities, if any, denominated in foreign currencies at the financial position date are translated at the applicable rates of exchanges ruling at that date. Exchange differences are charged off as revenue expenditure in compliance with the provisions of IAS 21: The Effects of Changes in Foreign Exchange Rates.

3.17. Statement of Cash FlowsThe Statement of Cash Flow has been prepared in accordance with the requirements of IAS 7: Statement of Cash Flows. The cash generated from operating activities has been reported using the Direct Method as prescribed by the Securities and Exchange Rules, 1987 and as the benchmark treatment of IAS 7, whereby major classes of gross cash receipts and gross cash payments from operating activities are disclosed.

3.18. Events after The Reporting PeriodEvents after the reporting period that provide additional information about the company’s position at the date of Statement of Financial Position or those that indicate that the going concern assumption is not appropriate are reflected in the financial statements. Events after reporting period that are not adjusting events are disclosed in the notes when material.

4 (a). Property, Plant and Equipment As on June 30, 2019 Amount in Taka


Constructions

Plantand

Machinery

Furnitureand

Fixtures

Transportand

Vehicle

OfficeEquipment

Total

CostAt July 01, 2018Additions Transferred in & CapitalizedDisposal during the Year

3,343,741,442 - - -

6,794,566,920 -

703,230,227 -

12,154,522,473 1,465,749,248

905,532,878 (21,845,168)

247,566,170 18,622,458 1,252,298

-

926,148,671 88,962,490

- (16,485,538)

542,239,692 25,435,247 1,096,395

-

24,008,785,368 1,598,769,443 1,611,111,798

(38,330,706)

Cost at June 30, 2019 3,343,741,442 7,497,797,147 14,503,959,431 267,440,926 998,625,623 568,771,334 27,180,335,903

Accumulated DepreciationAt July 01, 2018Depreciation ChargedAdjustment for Assets disposed off

- - -

1,780,559,564 153,597,656

-

5,238,747,927

473,926,803 (8,555,677)

104,536,829 14,302,934

-

503,064,602 84,090,016

(13,851,547)

334,366,427 31,044,166

-

7,961,275,349

756,961,575 (22,407,224)

Accumulated Depreciation at June 30, 2019

- 1,934,157,220 5,704,119,053 118,839,763 573,303,071 365,410,593 8,695,829,700




Assets include leasehold assets of Tk. 1,331,967,914 at cost and Tk. 932,076,886 at carrying value.

As on June 30, 2018


Constructions

Plantand

Machinery

Furnitureand

Fixtures

Transportand

Vehicle

OfficeEquipment

Total

CostAt July 01, 2017Additions Disposal during the Year

3,343,741,442 - -

6,791,103,860 3,463,060

-

12,032,024,319 153,477,707 (30,979,553)

225,416,905 22,149,265

-

773,503,897 155,989,774

(3,345,000)

514,935,182 27,304,510

-

23,680,725,605 362,384,316 (34,324,553)

Cost at June 30, 2018 3,343,741,442 6,794,566,920 12,154,522,473 247,566,170 926,148,671 542,239,692 24,008,785,368

Accumulated DepreciationAt July 01, 2017Depreciation ChargedAdjustment for Assets disposed off

- - -

1,620,406,516

160,153,048 -

4,766,780,484

501,033,877 (29,066,434)

91,105,709 13,431,120

-

439,348,695 66,773,574 (3,057,667)

302,679,677 31,686,750

-

7,220,321,081

773,078,369 (32,124,101)

Accumulated Depreciation at June 30, 2018

- 1,780,559,564 5,238,747,927 104,536,829 503,064,602 334,366,427 7,961,275,349




4 (b). Revaluation Surplus

S.F. Ahmed & Co, Chartered Accountants and Valuers revalued the land, building and plant & machinery of the Company as of December 31, 2008, following “Current Cost Method”. Such revaluation resulted into a revaluation surplus aggregating Tk. 1,711,174,747. Current balance is arrived at as follows:

Opening Balance 1,159,277,845 1,190,203,818

Adjustment for depreciation on revalued assets (9,175,291) (10,382,600)

Adjustment for Deferred Tax on revalued assets (18,249,550) (20,543,373)

1,131,853,004 1,159,277,845

Amount in Taka

Capital Work in Progress is arrived at as follows : June 30, 2019 June 30, 2018

Opening Balance 12,597,594,779 8,012,063,489

Addition during the year 2,738,450,860 4,585,531,290

15,336,045,639 12,597,594,779

Transferred & Capitalized (1,611,111,798) -

Building and Other Constructions (703,230,227) -

Plant & Machinery (905,532,878) -

Furniture & Fixture (1,252,298)

Office Equipment (1,096,395)

Closing balance at end of year 13,724,933,841 12,597,594,779

5. Intangible Assets

Particulars Product development, Licensing and Marketing Rights

ERP Project Total

Cost As on July 01, 2018Addition During the year

509,988,617

108,963,430

147,447,850 19,655,852

657,436,467 128,619,282

As on June 30, 2019 618,952,047 167,103,702 786,055,749

AmortizationAs on July 01, 2018Amortized During the year

131,741,051 44,193,000

-

-

131,741,051 44,193,000

As on June 30, 2019 175,934,051 - 175,934,051

Balance as on June 30, 2019 443,017,996 167,103,702 610,121,698

Balance as on June 30, 2018 378,247,566 147,447,850 525,695,416

6. Investment in Subsidiaries Amount In Taka

June 30, 2019 June 30, 2018

Nuvista Pharma Ltd. 2,125,186,000 2,125,186,000

Beximco Pharma API Limited 19,999,900 -

2,145,185,900 2,125,186,000

(a) The Company acquired 10,013,474 shares of Nuvista Pharma Ltd (NPL) representing 85.22% of the Paid Up Capital of NPL. The acquisition was completed on April 2, 2018. The investment in subsidiary represents the Purchase Consideration paid for the aforesaid acquisition and includes an amount of Tk. 31,336,000 paid as share transfer fee to the Registrar of Joint Stock Companies and Firms.

(b) Beximco Pharma API Limited (API) was formed with a paid up capital of Tk. 20,000,000 divided into 2,000,000 shares of Tk. 10 each, all of which excepting 10 shares are held by Beximco Pharmaceuticals Ltd (BPL). To comply with the regulatory requirement a nominal 10 shares has been issued to an individual.

(c) Investment in subsidiaries has been accounted for using cost method as per IAS 27.10(a): Separate Financial Statements, in preparing financial statements of the company.

8. Other Investments

(a) Investment Details ( Taka):


Addition/ AdjustmentUnrealised Gain/

(Loss)


(i) Bangladesh Export Import Co. Ltd. (Note C ) 4,188,358 (428,429) 3,759,929

(ii) Central Depository Bangladesh Ltd. (CDBL) 1,569,450 - 1,569,450

5,757,808 (428,429) 5,329,379

(b) Number of Shares:


Addition/ AdjustmentStock Dividend


(i) Bangladesh Export Import Co. Ltd. 159,861 7,993 167,854

(ii) Central Depository Bangladesh Ltd. (CDBL) 571,182 - 571,182

(c) The shares of Bangladesh Export Import Co. Ltd. are listed in Dhaka and Chittagong Stock Exchanges. The market value of each share of Bangladesh Export Import Co. Ltd. on the last working day of the year 2018-2019 was Tk. 22.40 (2017-2018: Tk.26.20). The amount of Tk. 428,429 represents fair value loss.(d) Shares of Central Depository Bangladesh Ltd.(CDBL) are not traded.

7. Investment in AssociatesBalance

July 01, 2018Adjustment during

the YearBalance

June 30, 2019

BioCare Manufacturing SDN.BHD. , Malaysia 30,749,850 (1,424,130) 29,325,720

This represents 1,500,000 Ordinary Shares of Malaysian Ringgit (RM) 1 each issued to Beximco Pharmaceuticals Ltd. by BioCare Manufacturing Sdn Bhd (“BioCare”), Malaysia. Beximco Pharmaceuticals Ltd. was issued 30% of the equity share of the Malaysian based company for providing full technical support to set up a manufacturing facility in Seri Iskandar Pharmaceutical Park, Perak, Malaysia and to produce specialized pharmaceutical products. BioCare is considered to be an associate of BPL as per IAS 28: Investment in Associates and Joint Ventures. The Company adopted Cost method for the investment as per IAS 27: Separate Financial Statements and therefore unrealized exchange fluctuation gain accounted for in previous financial statements has been reversed to arrive at cost value.

9. Inventories Amount in Taka

This consists of as follows : June 30, 2019 June 30, 2018

Finished Goods 1,155,804,007 744,138,733

Work in Process 420,135,832 205,169,517

Raw Materials 2,590,103,665 2,040,109,375

Packing Materials 1,072,840,831 939,299,203

Laboratory Chemicals 27,356,035 4,001,948

Physician Samples 85,135,960 82,714,044

R & D Materials 12,004,065 324,655

Materials in Transit 210,168,776 649,691,986

5,573,549,171 4,665,449,461

10. Spares & Supplies


Spares & Accessories 569,443,182 537,366,837

Stock of Stationery 13,100,977 10,936,969

Literature & Promotional Materials 132,797,157 106,477,464

715,341,316 654,781,270

11. Accounts Receivable

This is net of provision for bad debts Tk. 2,193,977. Accounts receivable includes an amount of Tk. 771,731,426 (equivalent USD 9,214,704 as on June 30, 2019 (June 30, 2018: Tk. 596,463,606, USD 7,190,640) against export sales. Part of the export sales receivables are against Letter of Credit while the rest are unsecured but considered good.

Accounts Receivable also includes Tk. 2,335,457,132 due from I & I Services Ltd., who provides distribution service to the Compa-ny and a “Related Party”. The maximum amount due from that company during the year was Tk. 2,348,527,632 on May 31, 2019.

No amount was due from the directors, managing agent, managers and other officers of the company and any of them severally or jointly with any other person.

12. Loans, Advances and Deposits Amount in Taka

This is unsecured, considered good and consists of as follows : June 30, 2019 June 30, 2018

Clearing & Forwarding 159,119,478 162,932,842

VAT 306,316,482 188,082,567

Claims Receivable 6,320,466 19,642,831

Security Deposit & Earnest Money 62,559,041 47,836,614

Lease Deposit 10,821,850 17,600,613

Capital Expenditure/ Project 224,723,000 108,792,585

Expenses 253,580,629 131,833,344

Bank Guarantee Margin 37,773,704 27,004,835

Advance against Salary 152,573,688 116,813,989

Rent Advance 13,420,366 11,608,729

Motor Cycle 199,755,875 180,739,474

Raw & Packing Material 592,000,065 735,793,984

Prepaid Insurance 160,757,931 197,698,816

Overseas Liaison Office 35,318,373 32,698,675

Others 57,999,873 87,761,063

2,273,040,821 2,066,840,961

(a) The maximum amount due from the employees during the year was Tk. 162,593,348 on April 30, 2019.

(b) No amount was due from the directors, managing agent, managers and other officers of the company and any of them severally or jointly with any other person, except as stated above.

(c) Prepaid Insurance includes the insurance premium paid to German Export Credit Agency Euler Hermes Aktiengesellschaft, Hamburg for guarantee of the project loan which is an integral part of the overseas loan financing agreement with ODDO BHF Aktiengesellshaft, Frankfurt, Germany. Expired portion of the prepaid insurance has been capitalized.

13. Short Term Investment

This represents the Company’s temporary investment with Bangladesh Export Import Company Limited (Beximco Ltd.), carrying interest 1% above bank interest rate.

14. Cash and Cash Equivalents June 30, 2019 June 30, 2018


(a) Cash in Hand (including Imprest Cash) 235,175,572 191,916,333

(b) Cash at Bank :

(i) Current & FC Account 310,734,039 142,718,744

(ii) FDR Account 36,396,437 34,473,477

582,306,048 369,108,554

15. Issued Share Capital Amount in Taka

A. Authorized :

June 30, 2019 June 30, 2018

No. of Shares Taka No. of Shares Taka

Ordinary Shares of Tk. 10/- each 1,000,000,000 50,000,000

10,000,000,000 5,000,000,000

500,000,00041,000,000

5,000,000,000 4,100,000,000 Fully convertible 5 % Preference Shares of Tk. 100/- each

15,000,000,000 9,100,000,000

During the year the company amended it’s Memorandum and Articles of Association and increased it’s Authorized Share Capital as stated above.

B. Issued, Subscribed and Paid-up :

30 June, 2019 June 30, 2018

51,775,750 shares of Tk. 10/- each fully paid-up in cash 517,757,500 517,757,500

316,538,298 Bonus Shares of Tk. 10/- each 3,165,382,980 3,165,382,980

5,951,250 Shares of Tk. 10/- each issued in Exchange of Shares of Beximco Infusions Ltd.

59,512,500

59,512,500

31,291,147 Shares issued on conversion of Preference Shares 312,911,470 312,911,470

4,055,564,450 4,055,564,450

5,951,250 Ordinary Shares of Tk. 10 each were issued to the shareholders of Beximco infusions Ltd. on it’s merger with Beximco Pharmaceuticals Ltd. In 2005.

41,000,000 fully convertible 5% preference shares of Tk. 100 each were issued in 2009. 50% of the preference shares were converted into 16,169,191 ordinary shares of Tk. 10 each on February 1, 2010. The rest 50% were converted into 15,121,956 ordinary shares of Tk. 10 each on May 2, 2010.

C. Composition of Shareholding of Ordinary Shares:

June 30, 2019 June 30, 2018



Sponsors: 8,235,353 8,254,632

37,019,789

2.03

2.04 9.13

8,235,3538,254,632

36,999,784

2.03 2.04 9.12

A S F Rahman Salman F Rahman Other Director and Associates

53,509,774 13.19 53,489,769 13.19

Public Issue:

GDRs- AIM of London Stock Exchange Foreign Investors’ Shareholdings (DSE/CSE) Institutions (ICB, ICB Investors Accounts & Others) Individual Share Holders

90,943,627 60,060,586

136,573,957 64,468,501

22.42 14.81 33.68 15.91

90,943,627 74,469,959

119,603,843 67,049,247

22.42 18.36 29.49 16.54

352,046,671 86.81 352,066,676 86.81

405,556,445 100 405,556,445 100

D. Distribution Schedule of Ordinary Shares:

Range of HoldingsIn number of shares

No. of Shareholders % of Shareholders Number of Shares % of Share Capital

June 30, 2019

June 30, 2018

June 30, 2019

June 30, 2018

June 30, 2019

June 30, 2018

June 30, 2019

June 30, 2018

1 to 499500 to 5,000 5,001 to 10,000 10,001 to 20,000 20,001 to 30,000 30,001 to 40,000 40,001 to 50,000 50,001 to 100,000 100,001 to 1,000,000 Over 1,000,000

41,958 12,144

980 469 154

77 70

121 163

41

43,579 12,360

969 478 147

72 60

116 163

38

74.69%21.62%

1.74%0.83%0.27%0.14%0.12%0.22%0.29%0.07%

75.16%21.32%

1.67%0.82%0.25%0.12%0.10%0.20%0.28%0.07%

5,876,193 17,827,041

7,015,971 6,683,931 3,819,206 2,686,413 3,220,468 8,692,718

51,410,310 298,324,194

6,030,643 18,111,978

6,952,640 6,834,127 3,629,536 2,493,725 2,724,479 8,267,895

48,891,611 301,619,811

1.45%4.40%1.73%1.65%0.94%0.66%0.79%2.14%

12.68%73.56%

1.49%4.47%1.71%1.69%0.89%0.61%0.67%2.04%

12.06%74.37%

Total 56,177 57,982 100% 100% 405,556,445 405,556,445 100% 100%

F. Option on unissued Ordinary Shares :

There is no option on unissued shares as on June 30, 2019.

16. Excess of Issue Price over Face Value of GDRs

This represents the issue price of 28,175,750 GDRs at Tk. 2,244,080,670 net off face value of underlying shares against GDRs and GDR issue expenses.

17. Long Term Borrowings - Net of Current Maturity

( a ) This is arrived at as follows : Amount in Taka

June 30, 2019 June 30, 2018

Project Loan - ODDO BHF Aktiengesellshaft, Frankfurt, Germany Obligation Under Finance Leases AB Bank

1,974,611,879 239,710,340 330,410,281

2,544,732,500

2,809,556,317 280,596,178 759,326,232

3,849,478,727

( b ) Project Loan - ODDO BHF Aktiengesellshaft, Frankfurt, Germany

This represents part of the foreign currency loan of US$ 51.559 million sanctioned by ODDO BHF Aktiengesellshaft, Frankfurt, Germany to partially finance the machinery and equipment to be procured for expansion and diversification project being implemented by the company. The loan has exclusive first charge by way of hypothecation against the machinery and equipment being procured under the finance. It carries interest @ 6 month’s USD LIBOR plus 2.25% per annum.

E. Market Price of Ordinary Shares:

The shares are listed in the Dhaka and Chittagong Stock Exchanges of Bangladesh and GDRs in the AIM of London Stock Exchange. Price of each Share/ GDRs on the last working day of the year were:

June 30, 2019 June 30, 2018

Dhaka Tk. 83.50 93.90

Chittagong Tk. 84.30 94.70

AIM GBP 0.389 0.510

Amount in Taka

( c ) Obligation Under Finance Leases June 30, 2019 June 30, 2018

Gross Finance Lease - minimum lease Liability:

Within one year 214,912,775 260,426,903


Total 501,676,741 596,568,617

Less future finance charges on finance lease liability (97,808,499) (114,965,180)



Within one year 164,157,902 201,007,259



( d ) A B Bank

This loan is payable in quarterly installments and is secured by paripassu hypothecation along with Janata Bank on all fixed and floating assets of the Company excepting the machinery and equipment financed by ODDO BHF Aktiengesellshaft, Frankfurt, Germany.

18. Liability for Gratuity and WPPF & Welfare Funds Liability for gratuity is the amount payable to the permanent employees at the time of separation from the company. The liability for WPPF refers to the undistributed portion of Workers’ Profit Participation and Welfare Fund lying with the company. Further detail is available at Note 3.12

(a) Gratuity Payable

Opening Balance 660,004,303 529,565,300

Provisions during the year 306,176,739 155,686,017

966,181,042 685,251,317

Paid during the year (32,743,298) (25,247,014)

Closing balance at end of the Year 933,437,744 660,004,303

(b) Workers Profit Participation and Welfare Fund 815,463,050 564,457,967

1,748,900,794 1,224,462,270

19. Deferred Tax Liability

Opening Balance 1,889,823,385 1,852,665,968

Addition during the Year :

Deferred Tax on Assets (cost basis)-Note : 34 (b) 94,498,243 16,614,044

Deferred Tax on revalued amount 18,249,550 20,543,373

Closing Balance at end of the Year 2,002,571,178 1,889,823,385

20. Short Term Borrowings Amount in Taka

June 30, 2019 June 30, 2018

Janata Bank Ltd. - Cash Credit-Hypothecation Loan 5,336,101,392 3,897,681,180

AB Bank 2,491,112,625 -

Liability for UPAS Letter of credit 873,810,482 1,064,417,066

8,701,024,499 4,962,098,246

(a) Short term borrowings from Janata Bank represents revolving credit facilities renewable annually. The borrowing carries 9% interest.

(b) Loan from AB Bank represents the Time Loan taken by the company to settle UPAS/Deferred LC liabilities related to import of various project materials other than machinery and equipment for different projects under implementation.

(c) The loan with Janata Bank and AB Bank is secured by paripassu hypothecation of fixed and floating assets of the company excepting the machinery and equipment financed by ODDO BHF Aktiengesellshaft, Frankfurt, Germany.

21. Long Term Borrowings-Current Maturity

This consists of as follows and is payable within next twelve months from the Balance Sheet date :

Project Loan - ODDO BHF Aktiengesellshaft, Frankfurt, Germany 860,104,664 852,470,599


AB Bank 462,991,847 400,341,697

1,487,254,413 1,453,819,555

22. Creditors and Other Payables

Goods & Services 518,625,291 569,160,255

Provident Fund 403,722,991 188,151,262

Advance Against Sales 23,952,936 43,576,730

Others 90,788,026 138,649,988

1,037,089,244 939,538,235

23. Accrued Expenses

This is unsecured, falling due within one year and consists of as follows :

For Expenses 300,660,035 136,464,535

Workers’ Profit Participation and Welfare Funds (current year) 195,518,256 166,983,289

496,178,291 303,447,824

24. Income Tax Payable Amount in Taka

June 30, 2019 June 30, 2018

Opening Balance 433,416,452 420,924,678

Provision for the year 809,208,912 790,580,483

Short / (Excess) Provision for previous year (16,843,012) -

1,225,782,352 1,211,505,161

AIT & Treasury deposits during the year (1,058,484,114) (778,088,709)

167,298,238 433,416,452

25. Net Sales Revenue

This consists of as follows : July 2018 - June 2019

July 2017 - June 2018

Domestic 18,653,698,522 15,903,750,112

Export 2,502,632,517 1,476,977,889

21,156,331,039 17,380,728,001

a) Revenue consists of sales of pharmaceutical formulation products of wide range of therapeutic categories in different dosage forms and strengths and Active Pharmaceutical Ingredients (APIs). The quantity sold under different broad categories are as follows:

Sales represents:

Product Category Quantity

Unit July 2018 - June 2019

July 2017 - June 2018

Tablet, Capsule, Suppository & DPI Million pcs. 5,778.50 4,520.25

Liquid, Cream and Ointment, Suspension, IV Fluid, Amino Acid, Ophthalmic, Nebulizer Solution, Injectable,Inhaler and Insulin

Million pcs. 111.96 97.08

Diet Care Products Pcs 6,572 21,566

Active Pharmaceutical Ingredients Kg 163,538 141,374

Liquid Nitrogen Liter 379,012 437,986

b) Foreign Currency equivalent of Export was US$ 30,064,573 in 2018-19 as against US$ 17,953,810 in 2017-18.

26. Cost of Goods Sold


Work-in-Process (Opening) 205,169,517 110,263,528

Materials Consumed (Note: 27) 9,461,947,813 7,174,927,962

Factory Overhead (Note: 28) 2,749,978,649 2,462,809,815

Total Manufacturing Cost 12,417,095,979 9,748,001,305

Work-in-Process (Closing) (420,135,832) (205,169,517)

Cost of Goods Manufactured 11,996,960,147 9,542,831,788

Finished Goods (Opening) 744,138,733 648,654,846

Finished Goods available 12,741,098,880 10,191,486,634

Cost of Physician Sample transferred to Sample Stock (219,365,187) (191,843,220)

Finished Goods (Closing) (1,155,804,007) (744,138,733)

11,365,929,686 9,255,504,681

27. Materials Consumed

July 2018 - June 2019

July 2017 - June 2018


Opening Stock 2,983,410,526 1,745,626,100

Purchase 10,168,837,818 8,412,712,388

Closing Stock (3,690,300,531) (2,983,410,526)

9,461,947,813 7,174,927,962

28. Factory Overhead

Salary & Allowances 1,027,826,755 861,570,554



Municipal Tax & Land Revenue 1,743,735 2,508,685




Entertainment 1,892,086 1,799,806

Research and Development 259,057,257 216,131,607



Toll Expense 217,766,232 211,932,071



Plant Certification and Regulatory Approvals 26,970,395 26,780,147

Depreciation 685,050,226 699,635,924


Other Expenses 2,985,133 5,417,512

2,749,978,649 2,462,809,815

Item wise quantity and value of Finished Goods Stock are as follows : Amount in Taka

Stock as June 30, 2019 Unit Quantity Value (Tk.)

Tablet, Capsule, Suppository & DPI Million pcs. 601.66 655,507,429

Liquid, Cream and Ointment, Suspension, IV Fluid, Amino Acid, Ophthalmic, Nebulizer Solution, Injectable, Inhaler and Insulin

Million pcs. 9.81 471,081,153

Active Pharmaceutical Ingredients Kg 9,390 29,215,425

1,155,804,007


Tablet, Capsule, Suppository & DPI Million pcs. 419.50 438,495,650

Liquid, Cream and Ointment, Suspension, IV Flu-id, Amino Acid, Ophthalmic, Nebulizer Solution, Injectable and Inhaler

Million pcs. 7.20 276,721,452

Active Pharmaceutical Ingredients Kg 9,592 26,362,126

Diet Care Products Pcs 4,918 2,559,505

744,138,733

(a) Salary and allowances include Company’s Contribution to provident fund amounting to Tk. 19,649,274 .

(b) Repairs and maintenance includes maintenance of office, premises, vehicles, building, equipment and other infrastructures. Also included therein imported stores and spares that has been consumed during the year.

(c) Other expenses does not include any item exceeding 1% of total revenue.

29. Administrative Expenses Amount in Taka

July 2018 - June 2019

July 2017 - June 2018

Salary & Allowances 369,071,303 299,668,418

Rent 10,998,853 11,320,578




Entertainment 6,875,109 6,605,694


Audit Fee 1,700,000 1,600,000



Legal & Consultancy 9,670,609 8,104,405

Business Acquisition Cost 2,876,555 12,619,081

Company Secretarial, Regulatory Fee and AGM Expense 27,156,197 32,250,219



Depreciation 26,493,655 27,057,743

Board Meeting Attendance Fee 838,950 468,564


Other Expenses 72,954,974 68,036,920

663,362,904 595,185,629


(b) Repairs and maintenance includes maintenance of office, premises, vehicles, building, equipment and other infrastructures.

(c) Remuneration is paid to the Directors for attending Board and Audit Committee Meetings.(d) Other expenses does not include any item exceeding 1% of total revenue.

30. Selling, Marketing and Distribution Expenses Amount in Taka

July 2018 - June 2019

July 2017 - June 2018

Salary & Allowances 1,505,566,145 1,212,995,091

Rent 82,061,605 77,134,110



Entertainment 53,789,575 53,216,266




Market Research & New Products 49,003,151 48,764,784



Sample Expense 277,485,580 261,921,844

Sales & Market Promotion Expenses 450,959,074 421,085,672

Pharmacovigilance 11,394,312 10,893,311

Literature/News Letter 188,842,902 128,227,175


Export Insurance, Freight and C&F Expenses 273,539,867 120,383,504


Delivery Expense 315,948,856 179,142,387

Depreciation & Amortization 89,610,694 90,578,669


Bad Debts 2,193,977 -

Other Expenses 1,310,119 11,625,705

4,328,264,764 3,548,437,826


(b) Distribution commission relates to I & I Services Ltd., a “ Related Party” for local sales of formulation products.

(c) Repairs and maintenance includes maintenance of office, premises, vehicles, building, equipment and other infrastructures.

(d) Sample expense includes VAT on sample and related dispatch expense.

(e) Other expenses does not include any item exceeding 1% of total revenue.

31. Other Income Amount in Taka

July 2018 - June 2019

July 2017 - June 2018

Interest Income 36,457,527 54,928,425

Dividend Income 1,491,901 1,504,092

Royalty 104,779,694 6,093,728

Technology Transfer Income - 18,145,620

Income From sale of Product Dossier - 4,959,000


Cash Incentive on Export 23,646,180 -

Exchange Rate Fluctuation Gain / (Loss) (20,010,341) (42,662,242)

Income from sale of materials 5,588,720 -

Profit/(Loss) on Sale of Fixed Assets (Note 41) 1,344,146 (846,352)

245,184,534 64,973,584

a. Taka 8,838,005 of the Royalty income comes from licensing of four of the BPL products given to Nuvista Pharma Limited while the remaining amount is from overseas business. b. The Distribution Commission is received from the subsidiary company Nuvista Pharma Limited for providing delivery of Nuvista’s products using the BPL’s distribution network across the country as per the agreement entered into between the companies on an arm’s length basis.

c. In December 2018, Government declared 10% incentives on FOB value of export of finished pharmaceutical formulation products subject to fulfillment of certain conditions. The incentive claimable during the reporting period as per the eligibility criteria has been accrued and accounted for. Further details are available in Note 3.10.

d. Exchange rate fluctuation gains has been netted off with the Exchange rate fluctuation losses. An exchange loss of Tk. 25,559,859 has been accounted for the translation of outstanding foreign currency loan from ODDO BHF Aktiengesellshaft, Frankfurt, Germany at the exchange rate prevailing on the financial position date.

32. Finance Cost

Interest on Working Capital Loan 734,759,832 361,626,873

Interest on Project / Consortium Loan - (21,183,793)

Interest on Lease Finance 59,643,281 73,199,604

Interest on Loan from PF, WPPF & Welfare Fund 128,075,983 85,080,425

Other Bank Charges 15,595,750 13,376,260

938,074,846 512,099,369

33. Contribution to WPPF & Welfare Funds

This represents statutory contribution by the company as per Bangladesh Labour Act (amendment) 2013. The amount is computed @ 5% of net profit before tax (but after charging such contribution).

34. Income Tax Expenses Amount in Taka

July 2018 - June 2019

July 2017 - June 2018


(a) Current Tax

(i) Tax provision for current Year (Note 3.9) 809,208,912 790,580,483

(ii) Short/(Excess) Provision for earlier year (16,843,012) -

792,365,900 790,580,483

(b) Deferred Tax Expense 94,498,243 16,614,044

886,864,143 807,194,527

Deferred Tax Expense is arrived at as follows:

Property, Plant & Equipment ( Difference in book value & Tax base) 8,943,722,454 8,219,297,841

Deferred liability (Gratuity) (933,437,744) (660,004,303)

Temporary Difference 8,010,284,710 7,559,293,538

Tax Rate 25% 25%

Deferred Tax Liability at end of the year 2,002,571,178 1,889,823,385

Deferred Tax Liability at beginning of the year 1,889,823,385 1,852,665,968

Change in Deferred Tax Liability 112,747,793 37,157,417

Deferred tax on Revaluation Surplus (18,249,550) (20,543,373)

Deferred Tax charged to profit or Loss and Other Comprehensive Income 94,498,243 16,614,044

35. Other Comprehensive Income - Unrealized Gain/(Loss)

Fair Value Gain/(Loss) on Investment in Listed Shares (428,429) (942,433)

Exchange Rate Fluctuation Gain or loss/adjustment (Note: 7) (1,424,130) 1,424,130

(1,852,559) 481,697

Reconciliation of Effective tax rate 2018-19 2017-18

% Tk. % Tk.

Profit before TaxApplicable Tax Effect of lower rate on Export Profit excluding Cash IncentiveEffect of lower rate on cash incentiveEffect of lower rate on dividend incomeEffect of permanent disallowances Tax impact of prior year adjustmentOthers

25.00%-2.42%-0.09%-0.00%1.09%

-0.43%-0.47%

3,910,365,117 977,591,279 (94,689,032)

(3,546,927)(74,595)

42,675,980 (16,843,012)(18,249,550)

25.00%-1.70%0.00%

-0.00%1.29%0.00%

-0.61%

3,366,165,790 841,541,448 (57,232,893)

0 (75,205)

43,504,550 0

(20,543,373)

Income Tax Expense 22.68% 886,864,143 23.98% 807,194,527

a. Export Profits are subject to 12.5% Tax rate b. 10% Tax deductible at source on the incentives is final tax liability on such income as per the Income Tax regulationsc. Dividend Income is taxable @ 20%d. Permanent disallowances relates to excess of sample expenses over the allowable ceilings under Income Tax regulations

36. Earnings Per Share (EPS) Amount in Taka



(a) Earnings attributable to the Ordinary Shareholders Tk. 3,023,500,974 2,558,971,263

(b) Weighted average number of Shares outstanding during the year (Note 3.15) 405,556,445 405,556,445

Earnings Per Share (EPS) Tk. 7.46 6.31

37. Net Asset Value (NAV) Per ShareJune 30, 2019 June 30, 2018

Total Assets 47,792,895,230 42,165,015,439

Less Total Liabilities (18,192,051,990) (15,060,625,508)

Net Assets 29,600,843,240 27,104,389,931

Number of Shares at Financial Position date 405,556,445 405,556,445

Net Asset Value (NAV) Per Share 72.99 66.83

38. Net Operating Cash Flow Per Share (NOCFPS) July 2018- June 2019


Net Cash Generated from Operating Activities 2,726,457,706 1,848,067,034


Net Operating Cash Flow Per Share (NOCFPS) 6.72 4.56

39. Reconciliation of Net Profit with Cash Flows from Operating Activities Profit after Tax 3,023,500,974 2,558,971,263

Adjustment to reconcile net profit to net cash provided by operating activities :

Non-cash Expenses : 1,445,651,201 972,619,072

Depreciation 756,961,575 773,078,369

Amortization 44,193,000 44,193,967

Gratuity & WPPF 524,438,524 107,367,841

Technology Transfer Income -BioCare Manufacturing SDN. BHD. , Malaysia - (18,145,620)

Exchange rate fluctuation loss on Foreign Currency Bank Loan 25,559,859 49,510,471

Deferred tax 94,498,243 16,614,044

Non-operating items: (3,051,665) (657,740)

Dividend Income (1,491,901) (1,504,092)

Profit on sale of Fixed Assets (1,344,146) 846,352

Effect of exchange rate changes on Cash and Cash Equivalents (215,618) -

Changes in working Capital (1,739,642,804) (1,682,865,561)

(Increase)/Decrease in Inventories (908,099,710) (1,197,360,400)

(Increase)/Decrease in Spares & Supplies (60,560,046) (18,678,378)

(Increase)/Decrease in Accounts Receivable (588,946,450) (569,604,280)

(Increase)/Decrease in Loans, Advances & Deposits (206,199,860) (369,161,543)

Increase/(Decrease) in Creditors and Other Payables 97,551,009 401,374,456

Increase/(Decrease) in Accrued Expenses 192,730,467 58,072,810

Increase/(Decrease) in Income Tax Payable (266,118,214) 12,491,774

Net cash Generated from Operating Activities 2,726,457,706 1,848,067,034

40. Related Party Disclosures

Following transactions were carried out with related parties in the normal course of business on arms length basis:

Name of Related Parties Nature of Transactions Value of Transaction Balance at year end

(a) I & I Services Ltd. Local Delivery Distribution Commission

22,217,416,177 260,673,378

2,335,457,132

(b) Bangladesh Export Import Co. Ltd Short Term Investment & Interest there on

16,032,638

323,364,536

(C) Nuvista Pharma Ltd Toll ExpenseCost of ServiceTransfer/Purchase of MaterialTransfer/sales of Material and AssetsDistribution Commission Income

9,093,735 36,914,574 19,432,198

48,328,432

91,886,707

1,767,727 10,628,065 1,493,892

217,748

8,165,323

41. Particulars of Disposal of Property, Plant and Equipment

The following assets were disposed off during the year ended June 30, 2019:

Particulars of Assets

Cost Accumulated Depreciation

Written Down Value

Sales Price Profit / (Loss)

Mode of Disposal

Name of Parties

Plant & Machinery 21,845,168 8,555,677 13,289,491 11,469,470 (1,820,021) Negotiation Various Individuals

Transport & Vehicle 16,485,538 13,851,547 2,633,991 5,798,158 3,164,167 Negotiation Various Individuals

Tk. 38,330,706 22,407,224 15,923,482 17,267,628 1,344,146

42. Payment / Perquisites to Managers and Directors

(a) The aggregate amounts paid to/ provided for the Managers and above of the company is disclosed below :

Amount in Taka

Remuneration 295,078,120

Gratuity 21,193,747

Contribution to Provident Fund 12,661,258

Bonus 32,476,179

Medical 5,971,918

Others 8,085,290

Total 375,466,512

(b) The above includes salary, allowances, and perquisites amounting Tk. 41,367,100 paid to the Managing Director.

(c) This also includes Tk. 838,950 paid to Directors including indipendednt Directors for attending Board and Audit Committee meetings.

(d) Excepting as stated above (c) no board meeting fee was paid to any directors.

(e) No amount of money was expended by the company for compensating any member of the board for special services rendered.

43. Production Capacity and Utilization

Item Unit Production Capacity

Actual Production

Capacity Utilization

July 18 to June 19

July 17 to June 18

July 18 to June 19

July 17 to June 18

July 18 to June 19

July 17 to June 18

Tablet, Capsule, Suppository & DPI Million Pcs

5,560.19

4,349.64 6,125.42 4,741.32 110.17% 109.00%

Liquid, Cream and Ointment, Suspension, IV Fluid, Amino Acid, Ophthalmic, Nebulizer Solution, Injectable, Inhaler and Insulin

Million Pcs

98.99 94.49 117.28 97.83 118.48% 103.53%

44. Capital Expenditure Commitment

There was no capital expenditure contracted but not incurred or provided for at June 30, 2019.

45. Finance Lease Commitment

At June 30, 2019, the company had annual commitment under finance leases as set out below :

Leases expiring within 1 year 164,157,902

Leases expiring within 2-5 years (inclusive) 239,710,340

403,868,242

46. Claim not Acknowledged as DebtThere was no claim against the company not acknowledged as debt as on June 30,2019.

47. Un-availed Credit FacilitiesThere is no credit facilities available to the Company under any contract, other than credit available in the ordinary course of business and not availed of as on June 30, 2019.

48. Payments Made in Foreign Currency :

Foreign Currency (Equivalent US$)

Taka

Import of Machinery, Equipment’s & Spares 17,235,944 1,456,665,927

Import of Material 70,060,442 5,894,863,149

Regulatory Fees, Foreign Currency Loan repayment & Other Expenses 17,202,059 1,453,573,983

49. Foreign Exchange Earned / Received :Foreign Currency (Equivalent US$)

Taka

(a) Collection from Export Sales 27,826,915 2,318,045,449

(b) Royalty Income 1,148,515 95,941,689

Production does not include goods manufactured under contract manufacturing arrangement from third party manufacturing sites.

50. Commission / Brokerage to selling agent :

No commission was incurred or paid to any sales agent nor any brokerage or discount other than conventional trade discount was incurred or paid against sales.

51. Contingent Liability

The company has a contingent liability aggregating Tk.150,788,789 against disputed income tax claims for the year 1999, 2007, 2008 and 2010. The company has filed Income Tax Reference cases with the High Court Division of the supreme court against these claims.

There is also a disputed VAT claim aggregating Tk. 144,113,691 against the company. The Company own the verdict of the Appellate Tribunal in its favor. The concerned authority filed appeal to the honorable High Court against this verdict. Additionally, there are claims of custom duty aggregating Tk. 22,507,358 against the indemnity bond issued by the company in connection with import of certain plant and machinery. The company has filed writ petitions against these claims.

If any liability arises on disposal of the cases, the company shall provide for such liability in the year of final disposal.

The company also has a contingent liability to the extent of Tk. 148,347,357 for third party corporate guarantee favoring Standard Bank Ltd. Dhanmondi Branch for Beximco Engineering Limited.

52. Events after The Reporting Period

(a) The directors recommended 15% cash dividend (i.e. Tk. 1.50 per share) for the year 2018-19. The dividend proposal is subject to shareholders’ approval at the forthcoming Annual General Meeting.

(b) The Company repaid Tk. 1,537,026,214 of the Time Loan of AB Bank Limited as reported in note 20.

c) Board of Directors of Nuvista Pharma Limited has declared dividend @ 20%, i.e. Tk. 2 per share for the financial year ended on June 30, 2019. The proposed dividend are subject to approval of the shareholders of NPL in the Annual General meeting scheduled on November 28, 2019.

Excepting above, no circumstances have arisen since the date of Statement of Financial Position which would require adjustment to, or disclosure in, the financial statements or notes thereto.

53. Financial Risk Management

The management of company has overall responsibility for the establishment and oversight of the company’s risk management framework. Risk management policies, procedures and systems are reviewed regularly to reflect changes in market conditions and the company’s activities. The company has exposure to the following risks for its use of financial instruments.

Credit risk

Liquidity risk

Market risk

53.01 Credit Risk

Credit risk is the risk of a financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the company’s receivables. Management has a credit policy in place and exposure to credit risk is monitored on an ongoing basis. As at June 30, 2019 substantial part of the receivables are those from its related company and subject to insignificant credit risk. Risk exposures from other financial assets. i.e. Cash at bank and other external receivables are nominal.

53.02 Liquidity Risk

Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. The company’s approach to managing liquidity ( cash and cash equivalents) is to ensure as far as possible, that it will always have sufficient liquidity to meet its liabilities when due under both normal and stressed conditions without incurring unacceptable losses or risking damage to the company’s reputation. Typically, the company ensures that it has sufficient cash and cash equivalent to meet expected operational expenses including financial obligations through preparation of the cash flow forecast with due consideration of time line of payment of the financial obligation and accordingly arrange for sufficient liquidity/fund to make the expected payment within due date. In extreme stressed conditions the company may get support from the related company in the form of short term financing.

53.03 Market Risk

Market risk is the risk that any change in market prices such as foreign exchange rates and interest will affect the company’s income or the value of its holdings financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters.

Currency riskThe company is exposed to currency risk on export revenues and import of raw material, machineries and equipment. Majority of the company’s foreign currency transactions are denominated in USD. Additionally the Company has foreign currency loan which shall be repaid in foreign currency. However, The Company maintains an Export Retention Quota (ERQ) account in USD where 50% of the export earnings are deposited. This partly contributes to minimize the currency risk associated with payments in foreign currency.

Interest rate riskInterest rate risk is the risk that arises due to changes in interest rates on borrowing. An increase in interest rates will result in higher borrowing costs and impact the Company’s profitability. The Company continuously monitors and negotiates viable deals to minimize the interest rate risk. Further, the company tries to remain at a lower level of gearing to minimize the impact of financing costs. With its strong ability to generate cash flows from operating activities, the company tries to pay off its debts on due time to minimize the impact of an increase in interest rates. The company has arrangement with banks to transfer the sales proceeds into its overdraft account on a real time basis through RTGS system to minimize borrowing cost. The foreign currency loan is subject to floating rates of interest. The company has not entered into any type of derivative instrument in order to hedge interest rate risk as at the reporting date.





Nuvista Pharma Limited Auditor’s Report and Financial StatementsAs at and for the year ended 30 June 2019

Independent auditor’s reportTo the shareholders of Nuvista Pharma Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Nuvista Pharma Limited (the Company), which comprise the statement of financial position as at 30 June 2019, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as at 30 June 2019, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994 and other applicable laws and regulations.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirement that are relevant to our audit of the financial statements in Bangladesh, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.


Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.


• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on

the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Report on Other Legal and Regulatory Requirements

In accordance with the Companies Act 1994, we also report the following:

(a) we have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our examination of those books; and

(c) the statement of financial position and statement of profit or loss and other comprehensive income dealt with by the report are in agreement with the books of account.

Dhaka, 22 October 2019

A. Qasem & Co.Chartered Accountants

Partner: Mohammad Motaleb Hossain

Nuvista Pharma Limited Statement of financial position As at 30 June 2019

30 June 2019 30 June 2018

ASSETS Notes Taka Taka

Non-current assets

Property, plant and equipment 4 1,212,496,913 1,245,065,897

Capital work-in-progress 5 8,180,190 15,956,525

Loan to employees 6 6,321,316 6,099,718

1,226,998,419 1,267,122,140

Current assets

Advances, deposits and prepayments 7 33,145,875 42,294,454

Loan to employees 6 3,317,051 3,679,374

Advance income tax net of tax provision 8 35,681,115 32,568,508

Inventories 9 361,268,453 402,528,046

Trade receivables 10 31,341,064 26,879,082

Cash and cash equivalents 11 28,152,726 24,627,392

492,906,284 532,576,856

Total assets 1,719,904,703 1,799,698,996

EQUITY AND LIABILITIES

Shareholders’ equity

Share capital 12 117,501,600 117,501,600

Reserves and surplus 13 423,587,141 334,874,560

541,088,741 452,376,160

Non-current liabilities

Lease obligation - long term portion 14 7,664,875 -

Long term bank borrowings 15 43,210,417 167,946,540

Deferred liability - gratuity payable 16 106,585,224 99,704,228

Deferred tax liabilities 17 144,852,403 137,448,710

302,312,919 405,099,478

Current liabilities and provisions

Lease obligation - current portion 14 1,608,361 -

Short term bank borrowings 18 699,284,556 753,898,579

Trade payables 19 53,587,152 54,488,508

Liabilities for expenses 20 99,996,369 100,860,014

Other liabilities 21 22,026,605 32,976,257

876,503,043 942,223,358

Total liability 1,178,815,962 1,347,322,836

Total equity and liabilities 1,719,904,703 1,799,698,996

Footnotes:1. Auditors’ Report - page 12. The annexed notes 1 to 35 form an integral part of these financial statements.

Chairman


As per our report of same date


Managing Director Director

Nuvista Pharma Limited Statement of profit or loss and other comprehensive income For the year ended 30 June 2019

30 June 2019 30 June 2018

Notes Taka Taka

Revenue 22 1,669,392,491 1,319,875,856

Cost of goods sold 23 (833,024,115) (666,021,602)

Gross profit 836,368,376 653,854,254

General and administration expenses 24 (88,443,477) (120,728,065)

Selling and distribution expenses 25 (543,485,224) (496,322,557)

Profit/(loss) from operations 204,439,675 36,803,632

Non-operating income/(expenses) 26 1,046,563 (2,543,380)

Interest expenses 27 (91,687,696) (92,782,227)

Profit/(loss) before tax and WPPF 113,798,542 (58,521,975)

Contribution to WPPF (5,418,978) -

Profit/(loss) before tax 108,379,564 (58,521,975)

Tax expense

Current 8 (11,394,946) (7,919,255)

Deferred 17 (7,403,693) (28,288,644)

(18,798,639) (36,207,899)

Profit/(loss) after tax 89,580,925 (94,729,874)

Other comprehensive income - -

Total comprehensive income/(loss) for the year 89,580,925 (94,729,874)

Earnings Per Share (EPS) 7.62 -8.06

Footnotes:

1. Auditors’ Report - page 1

2. The annexed notes 1 to 35 form an integral part of these financial statements.

Chairman





Nuvista Pharma Limited Statement of changes in equity For the year ended 30 June 2019

Particulars

Share capital

Reserves and surplus

Total General reserve

Share premium

Pre- incorporation

profit

Revaluation reserve

Retained earnings

Total reserves

and surplus

Taka Taka Taka Taka Taka Taka Taka Taka

Balance as at 1 July 2017 117,501,600 7,511,991 30,844,170 243,737 162,337,766 229,846,786 430,784,450 548,286,050

Dividend paid (1,180,016) (1,180,016) (1,180,016)

Loss after tax for the year ended 30 June 2018

- - - - - (94,729,874) (94,729,874) (94,729,874)

Balance as at 30 June 2018 117,501,600 7,511,991 30,844,170 243,737 162,337,766 133,936,896 334,874,560 452,376,160

Number of shares 11,750,160

Net assets value per share 38.50

Balance as at 1 July 2018 117,501,600 7,511,991 30,844,170 243,737 162,337,766 133,936,896 334,874,560 452,376,160

Dividend paid (868,344) (868,344) (868,344)

Profit after tax for the year ended 30 June 2019

- - - - - 89,580,925 89,580,925 89,580,925

Balance as at 30 June 2019 117,501,600 7,511,991 30,844,170 243,737 162,337,766 222,649,477 423,587,141 541,088,741

Number of shares 11,750,160

Net assets value per share 46.05

Chairman





Nuvista Pharma Limited Statement of cash flows For the year ended 30 June 2019

30 June 2019 30 June 2018

Taka Taka

A. Cash flows from operating activities

Cash receipts from customers and others 1,664,930,509 1,704,326,525

Cash paid to suppliers and employees (1,322,665,115) (1,421,067,187)

Cash generated from operation 342,265,394 283,259,338

Interest paid (94,334,168) (95,952,969)

Income tax paid (14,507,553) (18,954,575)

Net cash generated from operating activities 233,423,673 168,351,794

B. Cash flows from investing activities

Purchase of property, plant and equipment (59,226,082) (55,549,997)

Proceeds from disposal of property, plant and equipment 272,997 13,077,500

Net cash used in investing activities (58,953,085) (42,472,497)

C. Cash flows from financing activities

Long term bank borrowings (124,736,123) (34,264,154)

Short term bank borrowings (54,614,023) (52,076,010)

Lease finance 9,273,236 (39,863,419)

Dividend paid (868,344) (1,180,016)

Net cash (used in)/from financing activities (170,945,254) (127,383,599)

D. Net increase/(decrease) in cash and cash equivalents (A+B+C) 3,525,334 (1,504,302)

E. Opening cash and cash equivalents 24,627,392 26,131,694

F. Closing cash and cash equivalents (D+E) 28,152,726 24,627,392

Net operating cash flow per share 19.87 14.33

Number of shares 11,750,160 11,750,160

Chairman





Nuvista Pharma Limited Notes to the financial statements As at and for the year ended 30 June 2019

1. Reporting entity

1.1 Nuvista Pharma Limited (“the company”) was originally incorporated as a private limited company in 1973 in Bangladesh as Organon (Bangladesh) Limited under the Companies Act 1913. The company in its extra ordinary general meeting of the shareholders held on 02 November 2006 changed the name of the company from “Organon (Bangladesh) Limited” to “Nuvista Pharma Limited” which was approved by the Registrar of Joint Stock Companies and Firms on 29 November 2006.

The company in its extra ordinary general meeting held on 05 May 2011 made some amendments to the Memorandum and Articles of Association with a view to broadening the objects clause of the company (subsequently approved by the High Court on 12 October 2011), converting it into a Public Limited company, increasing its authorized capital, complying with the Companies Act 1994, and eliminating certain redundant provisions in the Articles of Association of the company consequent upon the transfer of Organon International’s shareholding in the Company, which were filed with the Registrar of Joint Stock Companies and Firms, Dhaka.

On 2nd April 2018, Beximco Pharmaceuticals Limited (BPL), a public limited company listed with Dhaka Stock Exchange, Chittagong Stock Exchange and AIM of London Stock Exchange has acquired majority shareholdings in Nuvista Pharma Limited (NPL) and through this acquisition BPL has become the immediate and ultimate parent of the company. Current shareholding comprises 85.22% by BPL, 12.92% by Government of Bangladesh and rest by other local shareholders.

1.2 The address of the registered office of the company is Plot no. 107/A, Mascot Plaza (8th floor), Sonargaon Janapath, Sector-7, Uttara C/A, Dhaka-1230, Bangladesh.

1.3 The company produces various pharmaceutical products including oral contraceptives, hormone, steroid, anti-histamine, anti-fibrinolytic, anti-infective, cardiac, gastrointestinal, musculoskeletal, respiratory, vitamin & mineral supplement and women’s health products which are sold in the local market.

2. Basis of preparation

2.1 Statement of compliance

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994 and other applicable laws and regulations.

Initial application of new standards

The company has initially applied IFRS 15 (see Note 3.13) and IFRS 9 (see Note 3.10) from 1 July 2018. These two new standards do not have a material effect on the company’s financial statements.

Due to the transition methods chosen by the company in applying these standards, comparative information throughout these financial statements has not been restated to reflect the requirements of the new standards.

2.2 Basis of measurement

The financial statements have been prepared on the historical cost basis except revaluation of certain property, plant and equipment.

2.3 Functional and presentational currency

These financial statements are prepared in Bangladeshi Taka (Taka/Tk.), which is the company’s functional currency. All financial information has been presented in Taka and rounded off to the nearest integer.

2.4 Use of estimates and judgments

The preparation of financial statements requires management to make judgment, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

Estimates and underlying assumptions are reviewed on an on going basis.

2.5 Going concern

The company has adequate resources to continue its operation for the foreseeable future. For this reason the directors continue to adopt going concern basis in preparing the financial statements. The current resources and credit facilities of the company are sufficient to meet the present requirements of its existing business.

2.6 Statement of cash flows

Statement of cash flows has been prepared in accordance with as per IAS 7: “Statement of cash flows” under direct method.

2.7 Reporting period

These financial statements cover one year from 1 July 2018 to 30 June 2019.

3. Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

3.1 Shareholders’ capital - paid-up capital

Paid-up capital represents the total amount of shareholders capital that has been paid in full by the ordinary shareholders. Holders of ordinary shares are entitled to receive dividends as declared from time to time.

3.2 Lease transactions

All lease transactions have been classified based on the extent to which risks and rewards incident to ownership of leased assets lie with the lessor or lessee. According to this classification, all the lease transactions have been identified as finance lease as per IAS 17: “Leases”, based on the substance of the transactions not merely the legal form.

Finance lease has been recognised as assets and liabilities in the Statement of financial position at amount equal at the inception of lease to the lower of fair value of leased property and present value of minimum lease payments. The interest rate implicit in the lease has been used to calculate the present value of minimum lease payments.

3.3 Staff gratuity fund

The company operates an unfunded gratuity scheme, provision in respect of which is made annually for all eligible employees. Gratuity payable to all eligible employees at the end of each year is determined on the basis of the existing rules and regulations of the company.

3.4 Employees provident fund

The company subscribes to a contributory provident fund for its permanent employees which is administered by a Board of Trustees.

3.5 Property, plant and equipment

3.5.1 Recognition and measurement

Property, plant and equipment (PPE) is recognised as an asset if it is probable that future economic benefits associated with the asset will flow to the entity and the cost of the item can be measured reliably.

Property, plant and equipment are stated at cost or valuation less accumulated depreciation and impairment losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the assets, bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by management.

3.5.2 Subsequent costs

The costs of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the company and its costs can be measured reliably. The costs of the day to day servicing of property, plant and equipment are recognised in the Statement of profit or loss and other comprehensive income as incurred.

3.5.3 Depreciation

Depreciation is recognised in the Statement of profit or loss and other comprehensive income on a straight line basis over the estimated useful lives of each item of property, plant and equipment. Depreciation on property, plant and equipment is charged from the month of acquisition. In case of disposals, depreciation is charged up to the immediate previous month of disposal. No depreciation is charged on leasehold land and capital work-in-progress. Depreciation is calculated and charged on all other property, plant and equipment at the following rates on cost or valuation, considering the estimated useful lives of the assets:

Factory building and warehouse 2.5%

Motor cars and vans 20%-25%

Plant, machinery and equipment 5% -15%

Computer and IT equipment 30%

Electric fixtures and fittings 7%

Furniture and fittings 6%

Gain or loss on sale of property, plant and equipment is recognised in the Statement of profit or loss and other comprehensive income as per provision of IAS 16: “Property, plant and equipment”.

3.6 Impairment

3.6.1 Recognition

The carrying value of the company’s assets, other than inventories, are reviewed at each Statement of financial position date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of the asset or its cash-generating unit exceeds its recoverable amount. Impairment losses, if any, are recognised in the Statement of profit or loss and other comprehensive income. For the assets that have indefinite useful life, the recoverable amount is estimated at each Statement of financial position date.

No indication of impairment was observed in the year ended 30 June 2019.

3.6.2 Calculation of recoverable amount

The recoverable amount of an asset is the greater of net selling price and value in use. The estimated future cash flows are discounted to their present value using discount rate that reflects the current market assessment of the time value of money and the risk specific to the asset. For an asset that does not generate significantly independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

3.6.3 Reversal of impairment

An impairment loss recognised in prior periods for an asset shall be reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, had no impairment loss been recognised for the asset in prior years.

There was no reversal of impairment in the year ended 30 June 2019.

3.7 Capital work-in-progress

Capital work-in-progress represents the cost incurred for acquisition and/or construction of items of property, plant and equipment that were not ready for use at the year end and these are stated at cost.

3.8 Taxation

Tax on the Statement of profit or loss and other comprehensive income for the year comprises current and deferred tax. Tax is recognised in the Statement of profit or loss and other comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

3.8.1 Current tax

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the Statement of financial position date, and any adjustment to tax payable in respect of previous years.

3.8.2 Deferred tax

Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax assets and liabilities are offset if there is a legal enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that is no longer probable that the related tax benefit will be realised.

3.9 Inventories

Inventories include raw materials, raw materials in transit, work-in-process, finished goods and spare parts. These are valued at the lower of cost and net realisable value, with appropriate provisions for obsolete and slow-moving items. Cost is determined using the weighted average method and includes all expenses incurred in bringing the inventories to their present location and condition.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

3.10 IFRS 9 Financial Instruments

IFRS 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. This standard replaces IAS 39 Financial Instruments: Recognition and Measurement.

There was no material impact of adopting IFRS 9 on the company’s statement of financial position as at 30 June 2019 and its statement of profit or loss and OCI for the year ended 30 June 2019 and the statement of cash flows for the year then ended.

IFRS 9 contains three principal classification categories for financial assets: measured at amortised cost, FVOCI and FVTPL. The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. IFRS 9 eliminates the previous IAS 39 categories of held to maturity, loans and receivables and available for sale.

IFRS 9 largely retains the existing requirements in IAS 39 for the classification and measurement of financial liabilities.

The adoption of IFRS 9 has not had a significant effect on the company’s accounting policies related to financial liabilities.

3.11 Foreign currency

3.11.1 Foreign currency transactions

Foreign currency transactions are converted into equivalent Taka at the ruling exchange rates on the respective dates of such transactions and subsequently retranslated using the rate at the date of settlement.

3.11.2 Foreign currency translations

Monetary assets and liabilities denominated in foreign currencies have been converted into Taka at the exchange rate ruling at the year end.

3.11.3 Translation gains and losses

Foreign exchange difference arising on translation are recognised in the Statement of profit or loss and other comprehensive income.

3.12 Provisions

A provision is recognised in the Statement of financial position when the company has a legal or constructive obligation as a result of past events, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

3.13 IFRS 15 Revenue from Contracts with Customers

IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaced IAS 18 Revenue, IAS 11 Construction Contracts and related interpretations. Under IFRS 15, revenue is recognised when a customer obtains control of the goods or services. Determining the timing of the transfer of control–at a point in time or over time–requires judgement. The company has adopted IFRS 15 using the cumulative effect method (without practical expedients), with the effect of initially applying this standard recognised at the date of initial application (i.e. 1 July 2018). Accordingly, the information presented for 2017-18 has not been restated–i.e. it is presented, as previously reported, under IAS 18 and related interpretations. Additionally, the disclosure requirements in IFRS 15 have not generally been applied to comparative information. There was no material impact of adopting IFRS 15 on the Company’s statement of financial position as at 30 June 2019 and its statement of profit or loss and OCI for the year ended 30 June 2019 and the statement of cash flows for the year then ended.

3.14 Interest expenses

Interest expense comprises interest expense on overdraft, import loan, demand loan, finance lease and term loan. All interest expenses are recognised in the Statement of profit or loss and other comprehensive income when it accrues.

3.15 Workers’ Profit Participation Fund (WPPF)

The company provides 5% of its net profit before tax after charging such expense as WPPF in accordance with Bangladesh Labour Act 2006.

3.16 Standards adopted but not yet effective-IFRS 16: Leases

A new Standard IFRS 16: Leases, has been made effective for the reporting period beginning on or after 1 January 2019. The new standard has introduced a single on-balance sheet lease accounting model for leases and replaces the previously adopted IAS 17: Leases.

The Company has been consistently recording its underlying assets acquired under lease arrangement as Assets and the corresponding obligation as Liabilities in the financial statements. Lease payments made are apportioned between the finance expenses and the reduction of outstanding lease liability which are in compliance with IFRS 16, excepting the classification of the leased assets as “Right-of-use assets” in the Statement of Financial Position.

The Company has not early adopted IFRS 16 in preparing the financial statements and intends to do so when it becomes effective for the Company. This however, has no material impact on the reported financial statements.

3.17 Events after the reporting date

Events after the reporting date that provide additional information about the company’s position at the reporting date are reflected in the financial statements. Events after the reporting date that are not adjusting events are disclosed in the notes when material.

3.18 General

Previous year’s figures have been rearranged/reclassified wherever considered necessary to conform to current year’s presentation.

4. Property, plant and equipment

Particulars Leaseholdland

Factorybuilding

Factorywarehouse

Plant andmachinery

Motorvehicles

Computerand IT

equipment

Equipmentand electricfixtures and

fittings

Furniturefittings

Total

Taka Taka Taka Taka Taka Taka Taka Taka Taka

Cost or valuationAs at 1 July 2018Addition/transfer during the yearAdjustment/disposal

275,608,713

236,790,594

9,909,831 8,283,847

442,513,098 29,632,908

144,453,256

7,485,000 (5,661,407)

24,853,887 1,452,820 (102,600)

659,294,426 17,539,597

44,345,643 2,608,245

1,837,769,448

67,002,417 (5,764,007)

As at 30 June 2019 275,608,713 236,790,594 18,193,678 472,146,006 146,276,849 26,204,107 676,834,023 46,953,888 1,899,007,858

Accumulated depreciation

As at 1 July 2018Charge during the yearAdjustment/disposal

- 42,386,558 5,907,364

3,079,154 379,225

148,312,713 23,005,008

82,617,876 23,456,021 (5,503,391)

16,409,818 4,268,679

(81,519)

277,905,936 40,311,902

21,991,496 2,064,105

592,703,551 99,392,304 (5,584,910)

As at 30 June 2019 - 48,293,922 3,458,379 171,317,721 100,570,506 20,596,978 318,217,838 24,055,601 686,510,945

Net book value

As at 30 June 2019 275,608,713 188,496,672 14,735,299 300,828,285 45,706,343 5,607,129 358,616,185 22,898,287 1,212,496,913

As at 30 June 2018 275,608,713 194,404,036 6,830,677 294,200,385 61,835,380 8,444,069 381,388,490 22,354,147 1,245,065,897

4.1 Depreciation charge has been allocated as under

30 June 2019 Taka

30 June 2018 Taka

Conversion cost included in cost of goods sold (Note 23.3)General and administration expenses (Note 24)Selling and distribution expenses (Note 25)

79,655,332 3,403,571

16,333,401

80,838,538 6,735,673

18,316,805

99,392,304 105,891,016

4.2 Disclosure for revalued assets

The leasehold land is stated at revalued amount on the basis of the reports of external surveyor. The surplus on revaluation over the original cost of the assets was credited to revaluation reserve.

Land was revalued in 1976 for the first time. The company once again revalued its land, plant and machinery, and equipment at the time of divestment of Organon (Bangladesh) Limited in 2006. The Company’s land was further revalued in 2010.

5. Capital work-in-progress

As at 1 July 2018

Taka

Addition during

the year

Taka

Transfer to property, plant and equipment

Taka

As at 30 June

2019

Taka

Factory Warehouse - 8,283,847 8,283,847 -

Plant and machinery 12,877,107 16,755,801 29,632,908 -

Motor vehicles - 7,485,000 7,485,000 -

Furniture - 2,608,245 2,608,245 -

Equipment & Electric fixture and fittings

3,079,418 21,740,369 17,539,597 7,280,190

Computer and IT equipment - 2,352,820 1,452,820 900,000

Balance as at 30 June 15,956,525 59,226,082 67,002,417 8,180,190

6. Loan to employees 30 June 2019 30 June 2018

Taka Taka

Car loanGeneral loan

8,920,525 717,842

7,596,179 2,182,913

9,638,367 9,779,092

Current portion of loan to employees (3,317,051) (3,679,374)

Balance as at 30 June 6,321,316 6,099,718

7. Advances, deposits and prepayments

Advance against operating expenses 1,478,223 1,407,976

Rent advance - 1,700,850

Security deposits 5,413,179 2,631,154

VAT 23,005,354 31,556,463

Prepaid insurance 3,082,344 4,800,492

Others 166,775 197,519


8. Advance income tax, net of tax provision

Balance as at 1 July 32,568,508 21,533,188

AIT and treasury deposits during the year 14,507,553 18,954,575

Provision for the year (11,394,946) (7,919,255)


9. Inventories 30 June 2019 30 June 2018

Taka Taka

Stocks

Finished goods Semi-finished and Work-in-processRaw materials Chemicals Packing materialsMaterials-in-transit

99,377,976 35,395,067

120,721,981 17,482,090 25,507,548 51,997,845

119,998,485 57,553,706

143,365,346 23,977,793 31,820,560 16,682,330

350,482,507 393,398,220

Stores

Spare parts Laboratory consumablesMiscellaneous itemsSpares-in-transit

9,577,874 321,244 103,737 783,091

7,666,099 330,437 518,687 614,603

10,785,946 9,129,826


10. Trade receivables

Ageing of the trade receivables is as follows:

Receivables due over six months 4,619,964 6,284,139

Receivables due below six months 26,721,100 20,594,943


Above receivables are unsecured and considered good.

Trade receivables is net off provision for bad debts Tk. 700,618 during 2018-2019.

11. Cash and cash equivalents

Cash in hand 81,352 243,281

Cash at banks

Eastern Bank Limited The City Bank Limited Mutual Trust Bank LimitedDhaka Bank LimitedBRAC Bank LimitedIFIC Bank LimitedShimanto Bank LimitedJanata Bank LimitedNational Bank Limited

36,869 111,519

30,395 32,983 63,766

20,445,497 23,850

6,697,164 629,331

41,669 1,233,878

644,326 194,513

66,992 16,553,213

- 5,432,489

217,031

28,071,374 24,384,111


12. Share capital 30 June 2019 30 June 2018

Taka Taka

Authorised

50,000,000 Ordinary shares of Tk. 10 each 500,000,000 500,000,000

Issued, subscribed and paid-up

11,579,160 Ordinary shares of Tk. 10 each issued for cash 115,791,600 115,791,600

171,000 Ordinary shares of Tk. 10 each issued for consideration other than cash 1,710,000 1,710,000

11,750,160 117,501,600 117,501,600

Shareholding position

Nominal Value(Taka) Percentage of holding (%)

30 June 2019 30 June 2018 30 June 2019 30 June 2018

Beximco Pharmaceuticals LimitedGovernment of BangladeshOther shareholders (2019:28; 2018:28)

100,134,740 15,186,000

2,180,860

100,134,740 15,186,000

2,180,860

85.22 12.92

1.86

85.22 12.92

1.86

117,501,600 117,501,600

100 100

12.1 In 2012, the company raised its paid-up capital from Tk. 9,791,800 to Tk. 58,750,800 by issuing 4,895,900 rights share to the existing shareholders on the basis of 5R:1 (i.e. five rights share against one existing share held on the record date). However, the subscription against the rights share (632,750 share of Tk. 10 each) held by the Ministry of Industries, Govt. of Bangladesh was received on 20 June 2013.

12.2 In 2017, the company further raised its paid-up capital from Tk. 58,750,800 to Tk. 117,501,600 by issuing 5,875,080 rights share to the existing shareholders on the basis of 1R:1 (i.e. one rights share against one existing share held on the record date).

13. Reserves and surplus

General reserve 7,511,991 7,511,991

Share premium (Note 13.1) 30,844,170 30,844,170

Pre-incorporation profit 243,737 243,737

Revaluation reserve (Note 13.2) 162,337,766 162,337,766

Retained earnings 222,649,477 133,936,896


13.1 Share premium

This represents the amount received on 48,959 ordinary shares @ Tk. 630 each issued in 1997.

13.2 Revaluation reserve

This represents revaluation surplus on revaluation of land made during 2006 and 2010.

14 Lease obligationObligation under finance lease has been recognised as liability in the statement of financial position at amount equal at the inception of lease to the lower of fair value of leased property and present value of minimum lease payments. The interest rate implicit in the lease has been used to calculate the present value of minimum lease payments. The total of minimum lease payments at the statement of financial position date and their present value, for each of the following periods are as follows:

Minimum lease obligations

Present value

30 June 2019 30 June 2018

Taka Taka Taka

Not later than one year 2,634,716 1,608,361 -

Later than one year and not later than five years 9,475,435 7,664,875 -

12,110,151 9,273,236 -

15. Long term bank borrowings

Dhaka Bank Limited (Note 15.1) 171,018,192 283,116,730

Total long term bank borrowings 171,018,192 283,116,730

Less: Current portion (Note 18) (127,807,775) (115,170,190)


15.1 Dhaka Bank Limited

All loan liabilities outstanding with Mutual Trust Bank Limited and The City Bank Limited and lease finance liabilities with United Finance Limited were taken over by Dhaka Bank Limited with effect from 29 March 2018. Loan liabilities outstanding with Brac Bank Limited was also taken over by Dhaka Bank Limited with effect from 10 May 2015.

This also represents amount outstanding against the term loans taken from Dhaka Bank Limited on various dates for setting up the new Oral Solids facility and equipments at the factory.

15.2 Collateral

All loans are secured by a registered mortgage on specific factory land and buildings of the company.

15.3 Security

All loans are also secured with respect to the following:

a) Registered (1st charge) hypothecation on present and future plant and machinery, equipment, furniture and fixture of the company.

b) Registered (1st charge) hypothecation over all stock, book debts and receivables of the company.

c) Shares held by Beximco Pharmaceuticals Ltd. are kept under lien with Dhaka Bank Ltd.

d) Corporate guarantee issued by Beximco Pharmaceuticals Limited.

16. Deferred liability - gratuity payable 30 June 2019 30 June 2018

Taka Taka

Balance as at 1 July 99,704,228 148,114,957

Add : Provision made during the year 21,818,144 13,093,910

121,522,372 161,208,867

Less: Payments made during the year (14,937,148) (61,504,639)


17. Deferred tax liabilities

Deferred tax liabilities arrived at as follows:

Carrying amount on statement of

financial position date

Tax base Taxable/ (deductible) temporary difference

Taka Taka Taka

Year: 2018-2019

Property, plant and equipment 936,888,200 498,289,941 438,598,259

Provision for gratuity (net of payment) (106,585,224) (106,585,224)

Temporary difference 332,013,035

Applicable tax rate for items recognised in statement of comprehensive income 35%

Applicable tax rate for items recognised in equity 15%

Deferred tax Liabilities(a): (116,204,562)

Deferred tax liabilities on revaluation surplus (28,647,841)

Net deferred tax liabilities (144,852,403)

Carrying amount on statement of financial

position date

Tax base Taxable/ (deductible) temporary difference

Taka Taka Taka

Year: 2017-2018

Property, plant and equipment 969,457,185 558,893,333 410,563,852

Provision for gratuity (net of payment) (99,704,228) (99,704,228)

Temporary difference 310,859,624

Applicable tax rate for items recognised in statement of comprehensive income 35%

Applicable tax rate for items recognised in equity 15%

Deferred tax Liabilities(b): (108,800,869)

Deferred tax Liabilities on revaluation surplus (28,647,841)

Net deferred tax liabilities (137,448,710)

Deferred tax recognised in the statement of profit or loss and other comprehensive income in 2018- 19 (a-b) (7,403,693)

Deferred tax recognised in the statement of profit or loss and other comprehensive income in 2017-18 (28,288,644)

18. Short term bank borrowings 30 June 2019 30 June 2018

Taka Taka

Bank overdrafts

Dhaka Bank Limited (Limit Tk. 180,000,000) 86,077,696 161,151,048

86,077,696 161,151,048

Short term bank loans

The City Bank Limited - 2,507,475

Mutual Trust Bank Limited - 18,839,012

Dhaka Bank Limited 485,399,085 456,230,854

485,399,085 477,577,341

Current portion of long term loan (Note 15) 127,807,775 115,170,190

699,284,556 753,898,579

Collateral and security given against short-term finance are a part of overall financing arrangement with Dhaka Bank Limited as indicated in note 15. The interest rate is 11.5% -12.5% per annum and is payable on quarterly rests.

30 June 2019 30 June 2018

19. Trade payables Taka Taka

Trade payables 53,587,152 54,488,508

53,587,152 54,488,508

This represents amount due against purchase of raw, chemical and packing materials.

20. Liabilities for expenses

Promotional expenses, literature, etc. 61,186,648 63,918,269

Leave encashment 4,614,229 3,348,532

Audit fees 482,500 638,750

Legal and professional fees 100,000 324,570

Utilities 4,161,182 4,820,000

Local travelling 6,342,383 6,000,000

Accrued interest 2,396,834 5,043,306

Accrued expenses 20,712,593 16,766,587

99,996,369 100,860,014

21. Other liabilitiesSalary and allowances 858,729 945,243

Provident fund dues 2,109,941 2,056,929

Workers’ profit participation fund 5,418,978 -

Tax deducted at source 2,420 1,513,724

VAT deducted at source 809,848 746,136

Tax on salaries 1,025,940 1,247,964

Final settlement of staff 3,028,774 2,279,150

Corporate social responsibility project 374,270 1,305,270

Commission payable to ADL - 4,074,641

Commission payable to BPL 8,165,323 18,584,888

Unpaid dividend 232,382 222,312

22,026,605 32,976,257

22. Revenue

Net sales revenue 1,647,243,552 1,300,442,853

Toll income 22,148,939 19,433,003

1,669,392,491 1,319,875,856

Quantitative details of sales

Unit Quantity Quantity

Locally manufactured products Tabs 248,639,734 187,208,876

Caps 26,627,792 25,989,669

Amps & Suspensions 12,636,917 10,149,157

23. Cost of goods sold 30 June 2019 30 June 2018

Taka Taka

Opening stock of finished goods 119,998,485 68,228,503

Cost of production (Note 23.1) 818,843,227 724,888,476

Cost of goods available for sale 938,841,712 793,116,979

Cost of physician sample (6,439,621) (7,096,892)

Closing stock of finished goods (99,377,976) (119,998,485)

833,024,115 666,021,602

23.1 Cost of production

Opening stock of semi-finished and WIP 57,553,706 88,832,381

Materials consumed (Note 23.2) 384,286,478 314,317,244

Conversion cost (Note 23.3) 412,398,110 379,292,557

854,238,294 782,442,182

Closing stock of semi-finished and WIP (35,395,067) (57,553,706)

818,843,227 724,888,476

23.2 Materials Consumed

Opening stock 199,163,699 146,325,774

Purchase 348,834,398 367,155,169

Closing stock (163,711,619) (199,163,699)

384,286,478 314,317,244

Item wise quantity and value of finished goods stock are as follows :

Stock as July 1, 2018 Unit Quantity Value (Tk.)

Tabs pcs. 45,743,691 68,178,896

Caps pcs. 9,778,283 21,313,752

Amps & Suspensions pcs. 1,430,023 30,505,837

119,998,485


Tabs pcs. 36,149,741 57,990,530

Caps pcs. 6,497,142 16,240,513

Amps & Suspensions pcs. 1,473,298 25,146,933

99,377,976

23.3 Conversion cost 30 June 2019 30 June 2018

Taka Taka

Salaries and allowances 149,373,933 134,687,674

Contribution to provident fund 1,849,408 1,958,417

Power and fuel 40,328,051 36,669,889

Factory supplies 23,074,599 16,552,550

Software and hardware support expenses 1,372,706 1,215,860

Canteen expenses 7,582,176 6,808,872

Insurance 2,323,671 2,999,015

Repair and maintenance 26,067,334 18,354,691

Security services 2,115,683 2,655,011

Toll manufacturing charges 2,373,469 16,507,781

Stores materials consumed 39,384,600 29,361,448

Product development cost 25,103,533 18,115,904

Long service award - 216,130

Overseas travelling expenses 3,096,144 3,163,453

Factory staff uniform 1,745,844 1,549,716

Printing and stationery 1,115,859 950,276

Entertainment 513,977 338,593

Vehicle repair, maintenance and running cost 2,858,401 2,468,713

Local authority taxes 596,521 2,220,120

Other expenses 1,866,869 1,659,906

Depreciation (Note 4.1) 79,655,332 80,838,538

412,398,110 379,292,557

24. General and administration expenses


Directors’ fees (Note 29) 270,000 390,000

Contribution to provident fund 977,634 2,377,913

Office rent 10,597,350 9,735,900


Local travelling expenses 1,036,923 977,100



Postage, telephone and internet 1,751,474 1,583,087

Printing and stationery 643,358 590,564

Advertisement - 234,000

Repairs and maintenance 966,473 898,909

Office supplies 1,093,223 1,814,488

Software and hardware support expenses 2,834,023 2,794,163

Utilities 1,956,937 1,830,471

Canteen expenses 2,748,550 2,514,497

30 June 2019 30 June 2018

Taka Taka

Local authority taxes 1,294,203 1,476,192

Medical expenses 111,076 1,494,167

Insurance premium 420,402 718,178

Statutory audit fees 350,000 325,000

Legal and professional expenses 177,993 1,281,370

Meeting and seminars 1,630,000 1,550,160

Bank charges - 863,299

General expenses 704,587 981,882


88,443,477 120,728,065

25. Selling and distribution expenses


Contribution to provident fund 4,469,662 3,702,016


Local travelling expenses 56,824,671 52,279,018


Samples 9,200,807 8,096,951

Promotional expenses 55,209,322 50,331,929

Royalty expenses 8,838,005 -

Literature, pad and handouts 18,986,879 16,817,775

Distribution commission 91,886,707 92,122,035

Conference and workshop 5,261,453 4,662,843

Advertisement 2,109,274 1,794,133


Postage, telephone and internet 9,926,979 9,490,821

Printing and stationery 1,071,518 963,632

Books and periodicals 1,008,359 1,245,934

Medical expenses 1,372,228 1,395,300

Training expenses 2,421,456 2,295,924

Prescription survey 460,000 917,253

Registration and renewals 1,025,056 613,695

Insurance premium 1,436,267 4,557,169

Office rent 4,413,633 4,560,136

Meeting and seminars 3,230,123 2,874,359

Bad debts 700,618 -

General expenses 1,174,979 1,580,550


543,485,224 496,322,557

26. Non-operating income/(expenses) 30 June 2019 30 June 2018

Taka Taka

Gain/(loss) on disposal of property, plant and equipment 93,900 (2,656,845)

Rental Income 649,800 -

Sale of miscellaneous items 302,863 113,465

1,046,563 (2,543,380)

27. Interest expenses

Interest on

Long term loan 27,718,969 32,695,455

Short term finance 62,379,912 55,468,898

Finance lease 466,666 4,617,874

Bank charges 1,122,149 -

91,687,696 92,782,227

28. Capacity utilisation Installed capacity

Actual production

Actual Utilisation

Unit Unit %

Amps & Suspensions 19,822,400 10,062,496 51%

Tablet 1,322,390,400 248,984,203 19%

Capsule 56,044,880 22,576,447 40%

29. Remuneration and fees to directors 30 June 2019 30 June 2018

Taka Taka

Remuneration (included in salaries and allowances) - 35,628,152

Fees (Note 24) 270,000 390,000

270,000 36,018,152

30. Auditors’ remuneration

Statutory audit fees 350,000 325,000

Special audit fees - 243,750

P.F. audit fees 35,000 35,000

WPPF audit fees 35,000 35,000

420,000 638,750

32. Payments made in foreign currency

Particulars 30 June 2019 30 June 2018

Foreign currency

(Equivalent USD) Taka Taka

Import of raw, chemicals and packing materials 3,021,018 256,786,558 223,457,810

Import of machinery and spare parts 389,544 33,111,263 13,619,571

289,897,821 237,077,381

33. Contingent liabilities

33.1 There is a contingent liability of Tk. 75,195,722 in respect of disputed tax claim. This matter has been referred to the High Court for a ruling and is still pending.

33.2 There is additional contingent liabilities in respect of outstanding letters of credit of Tk. 23,451,928 (June 2018: Tk. 20,778,877).

34. Number of employees engaged

The number of employees engaged for the whole period or part thereof who received a total remuneration of Tk. 36,000 and above were 1,007 (June 2018: 954).

35. Events after reporting date

The Board in its meeting dated 22 October 2019 recommended that cash dividend of 20% i.e. Tk. 2.00 per share, totalling Tk. 23,500,320 be paid for the year 2018-2019. The dividend proposal is subject to shareholders’ approval at the forthcoming annual general meeting.

Chairman Managing Director Director

Following transactions were carried out with related parties in the normal course of business on arms length basis:

Name of related party Relationship Nature of transactions Value of transaction Balance at year end

Beximco Pharmaceuticals Limited

Immediate and ultimate parent

Toll income 9,093,735 1,767,727

Cost of services 36,914,574 10,628,065

Transfer/ sales of Materials

19,432,198 1,493,892

Transfer/ purchases of Materials and assets

48,328,432 217,748

Distribution commission 91,886,707 8,165,323

31. Related party disclosures

Audit Report 2015-16 I 9


Audited Financial StatementsFor the Year Ended June 30, 2019


Independent Auditors’ Report

To the Shareholders of Beximco Pharma API Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the fi nancial statements of Beximco Pharma API Limited, which comprise the statement of fi nancial position as at June 30, 2019 and statement of profi t or loss and other comprehensive income, statement of changes in equity and statement of cash fl ows for the year then ended, and notes to the fi nancial statements, including a summary of signifi cant accounting policies.

In our opinion, the accompanying fi nancial statements give a true and fair view of the fi nancial position of the Company as at June 30, 2019 and of its fi nancial performance and its cash fl ows for the year then ended in accordance with International Financial Reporting Standards (IFRSs), the Companies Act 1994 and other applicable laws and regulations.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.

We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the fi nancial statements, and we have fulfi lled our other ethical responsibilities in accordance with these requirements and the IESBA code. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our opinion.

Responsibilities of Management and those Charged with Governance for the Financial Statements.

Management is responsible for the preparation and fair presentation of these fi nancial statements in accordance with, International Financial Reporting Standards (IFRSs), the Companies Act 1994, other applicable laws and regulations and for such internal control as management determines is necessary to enable the preparation of fi nancial statements that are free from material misstatement, whether due to fraud or error.

In preparing the fi nancial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s fi nancial reporting process.


Our objectives are to obtain reasonable assurance about whether the fi nancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to infl uence the economic decision of users taken on the basis of these fi nancial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional Skepticism throughout the audit. We also

• Identify and assess the risks of material misstatement of the fi nancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidences that is suffi cient and appropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.


2 I Audit Report 2015-16

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and based on the audit evidences obtained, whether a material uncertainty exists related to events or conditions that may cast signifi cant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the fi nancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidences obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the fi nancial statements, including the disclosures, and whether the fi nancial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain suffi cient appropriate audit evidence regarding the fi nancial information of the business activities of the company to express an opinion on the fi nancial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signifi cant audit fi ndings, including any signifi cant defi ciencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.


In accordance with the requirements of the Companies Act 1994 and other applicable laws and regulations, we also report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verifi cation thereof;

b) In our opinion, proper books of account as required by law have been kept by the company so far as it appeared from our examination of these books and;

c) The statement of Financial Position (Balance Sheet) and Statement of Profi t or Loss and Other Comprehensive Income (Profi t and Loss Account) dealt with by the report are in agreement with the books.

Dhaka M. J. Abedin & Co.

Date: August 11, 2019 Chartered Accountants



Statement of Financial Position

As at June 30, 2019

Amount in Taka Notes June 30, 2019 June 30, 2018

ASSETS

Non-current Assets: 20,000,000 -

Advance against purchase of Land 20,000,000 - Current Assets: 35,525 20,049,365

Cash and Cash Equivalents 4 35,525 20,049,365 Total Assets 20,035,525 20,049,365 EQUITY AND LIABILITIES

Shareholders’ Equity 18,862,199 18,909,192

Issued Share Capital 5 20,000,000 20,000,000 Retained Earnings (1,137,801) (1,090,808) Current Liabilities: 1,173,326 1,140,173

Accounts Payable 1,133,326 1,120,173 Audit Fees Payable 40,000 20,000 TOTAL EQUITY AND LIABILITIES 20,035,525 20,049,365

The notes are an integral part of the fi nancial statements.

S.M. Rabbur Reza Mohammad Ali Nawaz

Managing Director Director Per our report of even date.

Dhaka M. J. Abedin & Co.Date: August 11, 2019 Chartered Accountants



Statement of Profi t or Loss and Other Comprehensive Income

For the year ended June 30, 2019

Amount in Taka

Notes 2018 - 2019 2017 - 2018

Revenue - -

Cost of Revenue - -

Gross Operating Profi t/(Loss) - -

Administrative Expenses 6 (46,993) (1,090,808)Profi t/(Loss) from Operations (46,993) (1,090,808)

Income Tax Expense - - Net Profi t/(Loss) after Tax (46,993) (1,090,808)

Other Comprehensive Income - -

Total Comprehensive Income/(Loss) for the year (46,993) (1,090,808)




Dhaka M. J. Abedin & Co.

Date: August 11, 2019 Chartered Accountants



Statement of Changes in Equity

For the year ended June 30, 2019

Particulars Amount in Taka

Share Capital Retained Earnings Total

Balance as on July 01,2018 20,000,000 (1,090,808) 18,909,192 Net Loss for the year - (46,993) (46,993) Balance as on June 30, 2019 20,000,000 (1,137,801) 18,862,199

Number of Shares 2,000,000

Net Assets value per shares 9.43

For the period ended June 30, 2018

Particulars Amount in Taka

Share Capital Retained Earnings Total

Paid-up Share Capital 20,000,000 - 20,000,000 Net Loss for the period - (1,090,808) (1,090,808) Balance as on June 30, 2018 20,000,000 (1,090,808) 18,909,192

Number of Shares 2,000,000

Net Assets value per shares 9.45







Statement of Cash Flows

For the year ended June 30, 2019 Amount in Taka 2018- 2019 2017- 2018

Cash Flows from Operating Activities:

Payments for expenses & others (13,840) 49,365Net Cash Used in Operating Activities (13,840) 49,365

Cash Flows from Investing Activities:

Advance against purchase of Land (20,000,000) - Net Cash Used in Investing Activities (20,000,000) -

Cash Flows from Financing Activities:

Cash proceeds from issuing shares - 20,000,000Net Cash Generated from Financing Activities - 20,000,000

Increase in Cash and Cash Equivalents (20,013,840) 20,049,365

Cash and Cash Equivalents at the beginning of the Year 20,049,365 - Cash and Cash Equivalents at the end of the Year 35,525 20,049,365







Notes to the Financial Statements

As at and for the year ended June 30, 2019

1. Reporting Entity

1.01 Statutory Background of the Company

Beximco Pharma API Limited was incorporated in Bangladesh on December 12, 2017 as a Private Limited Company under the Companies Act, 1994. The Company is a fully-owned subsidiary of Beximco Pharmaceuticals Limited (BPL).

1.02 Nature of Business Activities

The company intends to set up a facility at API Industrial Park to manufacture Active Pharmaceutical Ingredients (APIs) for domestic and International markets. However, the Company is still in the initial phase of establishment and has carried out no operational activities.

2. Basis of Preparation

2.01 Basis of Measurement

The fi nancial statements have been prepared under historical cost convention which does not take into consideration the effect of infl ation.

2.02 Statement of Compliance

The fi nancial statements have been prepared in compliance with the requirements of the Companies Act, 1994 and International Financial Reporting Standards (IFRSs), and other relevant and applicable local laws and regulations.

2.03 Presentation of Financial Statements

The fi nancial statements comprise of:

a) a Statement of Financial Position as at June 30, 2019; b) a Statement of Profi t or Loss and other Comprehensive Income for the year ended June 30, 2019; c) a Statement of Changes in Shareholders’ Equity for the year ended June 30, 2019; d) a Statement of Cash Flows for the year ended June 30, 2019 and e) Notes, comprising summary of signifi cant accounting policies and explanatory information.

2.04 Reporting Period

Financial Statements of the company cover the period of 12 months from July 01, 2018 to June 30, 2019.

3. Functional and Presentation Currency

The fi nancial statements are prepared and presented in Bangladesh Currency (Taka), which is the company’s functional currency. All fi nancial information presented has been rounded off to the nearest Taka.


Amount in Taka

June 30, 2019 June 30, 2018

4. Cash and Cash Equivalents

This represents Cash at Bank with Current Account (IFIC Bank Limited, Dhanmondi Branch) 35,525 20,049,365 35,525 20,049,365

5. Issued Share Capital

A. Authorized:

100,000,000 Ordinary Shares of taka 10 each 1,000,000,000 1,000,000,000 1,000,000,000 1,000,000,000

B. Issued and Paid-up:

2,000,000 Ordinary Shares of taka 10 each paid in cash 20,000,000 20,000,000

20,000,000 20,000,000

C. Composition of Shareholding of Ordinary Shares

No. of Shares % of Shares Capital

Beximco Pharmaceuticals Limited 1,999,990 99.9995 S.M. Rabbur Reza 10 0.0005 2,000,000 100

2018-2019 2017-2018

6. Administrative Expenses

Legal Expenses 13,153 1,070,173 Audit Fees 20,000 20,000 Bank Charges 13,840 635

46,993 1,090,808


Managing Director Director DhakaDate: August 11, 2019

financial statements-consolidated -...

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